future generali total insurance solutions

8/12/2019 future generali total insurance solutions

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Future Generali

Total insurance solutions

Presents..


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Chapter-1

Introduction of the study


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Introduction of the study

Insurance can be described as a social device to reduce or eliminate the risk of life andproperty. Under the plan of insurance, a large number of people associate themselves by

sharing risks, attached to individual. Unit linked insurance plan (ULIP) provides for life

insurance where the policy value at any time varies according to the value of the underlying

assets at the time.

ULIP is a life insurance solution that provides for the benefits of protection and flexibility

of investment. The investment is denoted as units and is represented by the value that it has

attainted called as net asset value (NAV).ULIP came into play in 1960s and in popular in many

countries in the world. The reason that is attributed to the wide spread popularity of ULIP is

because of the transparency and the flexibility which it offers.

In todays time, ULIP provides solutions for insurance planning, financial needs, financial

planning for childrens marriage planning etc .ULIP is financial product that offers life insurance

as well as an investment like a mutual fund. Part of the premium pay goes towards the sum

assured and the balance will be invested in whichever investments consumers desire -equity,

fixed-return, or a mixture of both.

In India insurance development regulatory authority (IRDA) made various regulations on

ULIPS on 1

st

September 2010, like the changes such as increasing cap on various charges,change in the lockin period from 3 to 5 years.

Hence, the study has been conducted to understand about the consumers perception

on ULIPS. Their preference and related satisfaction towards ULIP policies, with special reference

to Future Generali life insurance Company.


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Need of study

This study is conducted to collect valuable information from the customers of Future

Generali India life insurance Company limited. The research study is about customers

preference and perception towards ULIPS. This study also explores about customers awareness

level of ULIP schemes.

Moreover, this survey helps to know the ground realities of the insurance market from

its customers. Also, this survey can be used as a link between the insurance companies and its

customers. This survey helps the customers to share their views, beliefs and experience in the

insurance market while purchasing the policies from various insurance companies.

On the other hand, it will help the insurance companies to take the findings of the

survey as suggestions from their own customers and try to improve their upon so as to attract

customers and to create a goodwill in the insurance market.

Moreover, this survey also helps the companies to identify various needs of customers

and to modify their basic plans thereafter and can also come up with new and innovative plans

to improve their market share by attracting more customers.


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Objectives of study

The objectives of the study are following:-

1) To study the customers preference and perception toward ULIP.2) To study the demographic and rational profile of customers of ULIP.3) To identify those factors, which enhance favorable opinion among consumers

towards ULIPS.

4) To study the customers satisfaction level towards ULIPS.5) To study the customers awareness level towards the investment criteria and

various facets about ULIPS.

6) To study customers investment trends in ULIPS.7) To study the required areas, where company need to focus to retain and attract

more customers for ULIP policies.


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Scope of study

The following are the scopes of the study:-

1) The subject matter relates to the investors approach towards ULIPs.2) This study may enable the company to take initiative in improving the new and existing

products.

3) In this study efforts are made to explore the existing degree of satisfaction prevailingamong the customers.

4) In this study efforts are made to understand the awareness level of different facetsabout ULIPs.

5) This study understands the prevailing problems related to ULIPs and its policyholders.6) This study understands the satisfaction level of policyholders.


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Research design

The objective is to study the customer preference on ULIPS.I have limited the scope of

the study to the analysis of the preferences of the different class and fields of people towards

ULIPS. The research has been done within the ULIP policyholders of the future generali life

insurance limited.

1) Population:-The existing ULIP policyholders of the company.

2) Sample size:-Total of 110 respondents have been taken for the research due to various

extraneous variables and factors.

3) Sampling technique:-Non-probability sampling technique has been used in this research, as the research

is confined to the clients of the organisation only. Quota sampling method is being

undertaken for the study.

4) Scaling techniques:-Multiple choice questions have been used in questionnaires and Likert-type scales is

also used in the questionnaire.

5)Data Collection:Data has been collected both from primary as well as secondary sources as described

below:

Primary sourcesThe Primary data has been collected by administry a schedule to various

employees working at various levels in future generali. The primary data has

been collected from various sources through interaction with concerned branch

manager and personal interview with employees and participating in their

discussion.

A successfully designed questionnaire has been canvassed on a sample of

110 respondents selected .


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Secondary sourcesThe secondary sources of data has been collected from annual reports,

company records, various websites , books, journals reports, articles, newspaper,

business magazines etc. This mainly provided information about the mutual fund

and ULIPS industry in India.

6) Data Tabulation:The data collected from this survey is tabulated in the form of Agree or Disagree or

also in the form of calculated percentages on the basis of the option given in the

questionnaire.

7) Analysis method:The collected data through a survey is analyzed by calculating percentages for eachand every question in the questionnaire and is depicted with the help of Pie Charts.

The findings and conclusions is drawn from these depicted bar diagrams and pie

charts.


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Limitations of the study

No study is free from limitations. The limitations of this study are as follows:-

1) Sample size taken is small and may not be sufficient to predict the results with 100%accuracy and the study is considered during the prevailing conditions, which are

likely to change in future.

2) The result is based on primary and secondary data that has its own limitations.3) The study only covers the area of Visakhaptnam that may not be applicable to other

areas.

4) We observe that time constraints to obtain more extensive information andunwillingness of respondents to answer some questions are some of the main

concerns.

5) The limited period allocated for the survey is not sufficient to analyze the market.6) This is possibility of collecting biased opinions from the people.7) Some respondents refused to give information.

Some other limitations are as follows:-

Lack of awareness among the people. Perception of the people towards Insurance product. Lack of awareness about the earning opportunity in the Insurance sector.


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Chapter- 2Industry Profile


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Industry profile

Introduction of Insurance sector

Insurance is the equitable transfer of the risk of a loss, from one entity to another in

exchange for payment. It is a form of risk management primarily used to hedge against the risk

of a contingent, uncertain loss.

An insurer, or insurance carrier, is a company selling the insurance; the insured, or

policyholder, is the person or entity buying the insurance policy. The amount of money to be

charged for a certain amount of insurance coverage is called the premium. Risk management,

the practice of appraising and controlling risk, has evolved as a discrete field of study and

practice.

The transaction involves the insured assuming a guaranteed and known relatively small

loss in the form of payment to the insurer in exchange for the insurer's promise to compensate

(indemnify) the insured in the case of a financial (personal) loss. The insured receives a

contract, called the insurance policy, which details the conditions and circumstances under

which the insured will be financially compensated.

Need of insurance

The need for insurance arises due to the risk associated with life, trade and other

commercial activities of which the future is known. This, in order to protect oneself from the

loss arising out future uncertainties, one has to go for insurance. The reason for buying an

insurance policy, whether life or non-life, is to protect oneself from vagaries of life. One does

not invest in insurance for returns; rather one invests in it for regrettable necessities. Some

people do look for tax concessions, but things have changed now. Concessions are limited and

tax saving schemes like public provident fund societies offers better returns. Various scams in

financial sector and ups and downs in share market tend to make insurance safer option. Also

natural calamities like earthquakes, floods, etc., add to the peoples perception of the need for

insurance.


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Evolution of insurance market in India

The evolution of insurance market dates back to 1818. The business of life insurance in

India in the year 1818 with the establishment of the Oriental Life Insurance Company in

Kolkata. Some of the important milestones in the insurance business in India are:

1912: The Indian Life Insurance Companies Act enacted as the first statute to regulate the Life

Insurance business.

1928: The Indian Insurance Companies Act enabled the government to collect statistical

information about life and non-life insurance business.

1938: Earlier legislation was consolidated and amended by the Insurance Act with the objective

of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the Central

Government were nationalized. LIC formed by an Act of parliament, viz., LIC Act 1956, with a

capital contribution of Rs 5 crores from the Government in India.

Prior to 1956, a large number of organizations were managing life insurance and general

insurance business. But in 1956, the life insurance business was nationalized and monopoly was

vested with Life Insurance Corporation (LIC). Similarly in 1972, the general insurance business

was nationalized and started to be managed by General Insurance Corporation (GIC) and its

four subsidies namely National Insurance Company Limited, New India Assurance Company

Limited, Oriental Fire and General Insurance Company Limited and United Company Limited.

The governmentsconcern about the state of the insurance industry was revealed in the

early nineties, when an expert committee was set up under the chairmanship of late

R.N.Malhotra.

Amongst the various recommendations put in by the Malhotra Committee, the most

important recommendations was the opening up of the insurance industry, subject to the

conditions that a private insurer should have a minimum paid up capital of Rs.100 crores, and

that the promoters stake in the otherwise widely held company should not be less than 26

percent and not more than 40 percent.


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Subsequent to the submission of its report by the Malhotra Committee, Insurance

Regulatory Authority(IRA) Bill was introduced in the parliament. In November 1998, the Central

Cabinet approved the Bill, which envisaged a ceiling of 26 percent for non-Indian stakeholders.

The committee has also recommended that the minimum paid up share capital of the new

insurance companies be raised to Rs.200 crores, double the amount proposed by the Malhotra

Committee. Today, due to these developments, the Indian Insurance market stands wide open

and has attracted a host of global players.

Malhotra committee:-

In 1993, Malhotra Committee headed by former finance secretary and RBI governor

R.N.Malhotra, was formed to evaluate the Indian Insurance industry and recommended its

future direction. The Malhotra Committee was set up with the objective of implementing the

reforms initiated in the financial sector. The reforms were aimed at creating a more efficient

and competitive financial system suitable for the requirements of the economy keeping in mind

the structural changes currently underway and recognizing that insurance is an important part

of the overall financial system where it was necessary to address the need for similar

reforms...

Recommendations:-

Malhotra Committee made some recommendations to improve the penetration of

insurance. They include:

Government stake in the insurance companies to be brought down to 50%.

Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries

can act as independent corporations.

All the insurance companies should be given greater freedom to operate.


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Competition

Private companies with a minimum paid of Rs.1 billion should be allowed to enter the

industry.

No company should deal in both life and general insurance through a single entity.

Foreign companies may be allowed to enter the industry in collaboration with the domestic

companies. Postal life insurance should be allowed to operate in the rural market.

Only one state level life insurance company should be allowed to operate in each state.

The insurance Act should be changed and an insurance regulatory body should be setup.

Controller of insurance should be made independent

Investments

Mandatory Investments of LIC Life Fund in government securities to be reduced from

75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company.

Costumer service:-

LIC should pay interest on delays in payments beyond 30 days. Insurance companies

must be encouraged to set up unit linked pension plans. Computerization of operations and

updating of technology to be carried out in the insurance industry. The committee emphasized

that in order to improve the customer service and increase the coverage of the insurance

industry should be opened upto competition. But at the same time, the committee felt the

need to exercise caution as any failure on the part of new players could ruin the public

confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the minimum

capital requirement of Rs. 100 crores. The committee felt the need to provide greater

autonomy to insurance companies in order to improve their performance and enable them to

act as independent companies with economic motives. For this purpose, it had proposed

setting up an independent regulatory body.


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Organizational profile:-

Companys Profile: Future Generali

ABOUT THE COMPANY:

Future Generali is a joint venture between the India-based Future Group and the Italy-

based Generali Group.

Future Generali is present in India in both the Life and Non-Life businesses as Future

Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.

FUTURE GROUP

Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of Indias

leading business houses with multiple businesses spanning across the consumption space.

While retail forms the core business activity of Future Group, group subsidiaries are present in

consumer finance, capital, insurance, leisure and entertainment, brand development, retail real

estate development, retail media and logistics.

Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million

square feet of retail space in 71 cities and towns and 65 rural locations across India.

Headquartered in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and is

listed on the Indian stock exchanges. The company follows a multi-format retail strategy that

captures almost the entire consumption basket of Indian customers. In the lifestyle segment,

the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In

the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the

look, touch and feel of Indian bazaars with the choice and convenience of modern retail.

The groups specialty retail formats include sportswear retailer, Planet Sports,

electronics retailer, eZone, home improvement chain, Home Town and rural retail chain,

Aadhaar, among others. It also operates popular shopping portal,www.futurebazaar.com.
http://www.futurebazaar.com/http://www.futurebazaar.com/http://www.futurebazaar.com/http://www.futurebazaar.com/


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Future Capital Holdings, the groups financial arm, provides investment advisory to

assets worth over $1 billion that are being invested in consumer brands and companies, real

estate, hotels and logistics. It also operates a consumer finance arm with branches in 150

locations.

Other group companies include, Future Generali, the groups insurance venture in

partnership with Italys Generali Group, Future Brands, a brand development and IPR company,

Future Logistics, providing logistics and distribution solutions to group companies and business

partners and Future Media, a retail media initiative.

The groups presence in Leisure & Entertainment segment is led through, Mumbai-

based listed company Galaxy Entertainment Limited. Galaxy leading leisure chains, Sports Bar

and Bowling Co. and family entertainment centers, F123. Through its partner company, Blue

Foods the group operates around 100 restaurants and food courts through brands like Bombay

Blues, Spaghetti Kitchen, Noodle Bar, The Spoon, Copper Chimney and Gelato.

Future Groups joint venture partners include, US-based stationery products retailers,

Staples and Middle East-based Axiom Communications. Future Group believes in developing

strong insights on Indian consumers and building businesses based on Indian ideas, as espoused

in the groups core value of Indianans. The groups corporate credo is, Rewrit e rules, Retain

values.THE GENERALI GROUP

The Generali Group is a leading player in the global insurance and financial markets.

Established in Trieste in 1831, today the Group is one of Europes largest insurance providers

and the European biggest Life insurer. It is also one of the worlds top asset managers with

assets totaling more than 400 billion. With an employed sales force of more than 100,000

people serving 70 million clients in 68 countries, the Group occupies a leadership position in

Western Europe and an increasingly important place in Eastern Europe and Asia.The Group strategy aims to consolidate Generalis pre-eminence on its key markets and

achieve a premier position on markets with high growth potential, establishing its leadership in

profitability.


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IDENTITY CARD:

Since its establishment, the Generali Group has always held a reputation for its capital

and financial strength. Its solidity derives from prudent investment management and a focus on

achieving a correct match between risk and medium/long-term profitability.

Generali Group is one of the leading insurance groups in Europe, with a 2009 totalpremium income of more than 70 billion

It is present in 68 countries

It has 70 million clients worldwide

It has 85,322 employees (15,956 in Italy)

It has over 400 billion of assets under management

High rating assigned by the international rating agencies:

A.M. BEST: A+ STABLE

Standard & Poors: AA- STABLE

Fitch Ibca: AA- NEGATIVE

Moodys: Aa3 STABLE

Vision Statement:

"Pledged to provide financial security to all people & enterprises through total insurance

solutions"

Values:

Respect: for all our stakeholders- employees, customers, for all rules and regulations

both internal and external.

Indianness:We understand India in all its diversity and different facets and will use forour local understanding to respond to our specific markets, design our products and craft our

processes.

Nimbleness:A combination of speed and quality, and ability to overcome all obstacles

which come in the way of the achievement of our vision.

"Can Do:An attitude which demonstrates our passion, entrepreneurship, and positive

thinking.

Positioning

Knowledge Organization with Leadership Approach

One Stop Total Insurance Solutions & Services ProviderCustomer Centric Model embracing Passion, Convenience and Service Excellence

Objective

To provide superior customer service through our knowledge-based business partners and

employees supported by innovative products and services.


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Chapter-3

Theoretical framework


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ULIP- Unit Linked Insurance Plans

Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual

funds in terms of their structure and functioning. As is the case with mutual funds, investors in

ULIPs is allotted units by the insurance company and a net asset value (NAV) is declared for the

same on a daily basis.

Similarly ULIP investors have the option of investing across various schemes similar to

the ones found in the mutual funds domain, i.e. diversified equity funds, balanced funds and

debt funds to name a few. Generally speaking, ULIPs can be termed as mutual fund schemes

with an insurance component.However it should not be construed that barring the insurance

element there is nothing differentiating mutual funds from ULIPs.

ULIPs are a category of goal-based financial solutions that combine the safety of

insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes

towards providing you life cover. The residual portion of the ULIP is invested in a fund which in

turn invests in stocks or bonds; the value of investments alters with the performance of the

underlying fund opted by you.Simply put, ULIPs are structured in such that the protection element and the savings

element are distinguishable, and hence managed according to your specific needs. In this way,

the ULIP plan offers unprecedented flexibility and transparency.

History

The first ULIP was launched in India in 1971 by Unit Trust of India (UTI). With the

Government of India opening up the insurance sector to foreign investors in 2001 and the

subsequent issue of major guidelines for ULIPs by the Insurance Regulatory and Development

Authority (IRDA) in 2005, several insurance companies forayed into the ULIP business leading toan over abundance of ULIP schemes being launched to serve the investment needs of those

looking to invest in an investment cum insurance product.

Working of ULIPs

A ULIP is basically a combination of insurance as well as investment. A part of the

premium paid is utilized to provide insurance cover to the policy holder while the remaining

portion is invested in various equity and debt schemes. The money collected by the insuranceprovider is utilized to form a pool of fund that is used to invest in various markets instruments

(debt and equity) in varying proportions just the way it is done for mutual funds. Policy holders

have the option of selecting the type of funds (debt or equity) or a mix of both based on their

investment need and appetite. Just the way it is for mutual funds, ULIP policy holders are also


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allotted units and each unit has a net asset value (NAV) that is declared on a daily basis. The

NAV is the value based on which the net rate of returns on ULIPs are determined. The NAV

varies from one ULIP to another based on market conditions and the funds performance.

FeaturesULIP policy holders can make use of features such as top-up facilities, switching between

various funds during the tenure of the policy, reduce or increase the level of protection, optionsto surrender, additional riders to enhance coverage and returns as well as tax benefits.

Types

There are a variety of ULIP plans to choose from based on the investment objectives of

the investor, his risk appetite as well as the investment horizon. Some ULIPs play it safe by

allocating a larger portion of the invested capital in debt instruments while others purely invest

in equity. Again, all this is totally based on the type of ULIP chosen for investment and theinvestor preference and risk appetite.


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Charges

Unlike traditional insurance policies, ULIP schemes have a list of applicable charges that

are deducted from the payable premium. The notable ones include policy administration

charges, premium allocation charges, fund switching charges, mortality charges, and a policy

surrender or withdrawal charge. Some Insurer also charge "Guarantee Charge" as a percentageof Fund Value for built in minimum guarantee under the policy.

Risks

Since ULIP returns are directly linked to market performance and the investment risk in

investment portfolio is borne entirely by the policy holder, one needs to thoroughly understand

the risks involved and ones own risk absorption capacity before deciding to invest in ULIPs.

Providers

There are several public and private sector insurance providers that either operate solo

or have partnered with foreign insurance companies to sell unit linked insurance plans in India.

The public insurance providers include LIC of India, SBI Life and Canara while some of the

private insurance providers include ICICI Prudential, HDFC Life, Bajaj Allianz, Aviva Life

Insurance and Kotak Mahindra Life.

Types of Funds offered

Most insurers offer a wide range of funds to suit ones investment objectives, risk profile

and time horizons. Different funds have different risk profiles. The potential for returns alsovaries from fund to fund.

The following are some of the common types of funds available along with an indication

of their risk characteristics.


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Review of literature

According to Agarwal (2010), ULIP helps to manage the risk return profile. With the

double advantage of security and investment, ULIPs have become the most popular insurance

product form the available range of life insurance policies.

Dipak Mondal (2010), the minimum sum assured in ULIPs is 5 times and most policies

offer covers between 5-10 times the annual premium which has been the signaling factor for

the investors.

Amar Ranu (2010), leading financial conglomerate says that other market related

products lags behind ULIPs returns by a larger margin in the long term which confirms that

investment in ULIPs is ideal investment vehicle for wealth creation in long run.

ULIPs are covered under sec 80(c),10 10(d),of IT act, hence tax benefits upto a maximum

of Rs.1,00,000 investment can claimed in these plans, {Sanjay Mathew (2010)}

According to Suddhadeb Chakraborti (2011), financial consultant and author discuss

about the latest amendments that it provides mortality healthcare mandatorily.


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Chapter-4

Analysis of study


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1) Age group of surveyed respondents:-Options respondents % of respondents

18-25 years 49 26%

26-35 years 27 44%

36-49 years 18 15%

50-60 Years 11 10%More than 60 years 5 5%

Total 110 100%

Inference: -

From the chart above, we find that 44% of respondents fall in the age group of 26-35

yrs, 26% fall in the group of 18-25 yrs and 15% fall in the age group of 36-49 yrs.

Therefore most of the respondents are relatively young, aged between 18- 35 yrs. As a

result, these young people can be induced to buy the insurance plans on the basis of its

tax saving nature and as an investment opportunity with high returns, which will be

beneficial for their spouse, children (if married).

26%

44%

15%

10%5%

AGE

18-25 yrs

26-35 yrs

36-49 yrs

50-60 yrs

>60 yrs


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2) Occupation:-Options respondents % of respondents

Public sector 31 30%

Private sector 21 21%

Retired 12 12%

Student 5 6%

Business 16 16%

Others 15 15%

Total 110 100

Inference:-

From the above data, we have found that 30% of respondents are under public sector, 21% ofpvt. Sector, 16% are business people. Thus we can see that mostly working professionals invest

into ULIP plans. These people have definite and regular source of income so they prefer

investing with the expectation of earning more money.

30%

21%12%

6%

16%

15%

occupation

public sector

pvt sector

retired

student

business

others


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3) Income:-Options respondents % of respondents

10,000-20,000 22 20%

20,000-30,000 32 29%

30,000-40,000 30 27%

>40,000 26 24%

Total 110 100

Inference:-

From the above data, its clear that people almost equally invest irrespective of their

income levels. Moreover, it has been seen that 29% of respondents are of income group

between 20,000-30,000, followed by the income group of 30,000-40,000 with 27%.

20%

29%27%

24%

income

10,000-20,000

20,000-30,000

30,000-40,000

>40,000


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4) Do you think life insurance is necessary:-Options respondents % of respondents

Yes 80 73%

No 30 27%

Total 110 100

Inference: -

From the above data, its clear that 73% of respondents thinks that life insurance is

necessary. On the contrary, 27% of respondents think that its not necessary.

73%

27%

life insurance is necessary

yes

no


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5) What percentage of your income do you invest :-Options respondents % of respondents

0-5% 19 17%

5-10% 41 37%

10-15% 28 25%

>15% 22 21%

Total 110 100%

Inference:-

From the above data, itsclear that respondents dont invest large part of their money

in ULIP plans, rather a smaller portion. 37% of respondents invest only 5-10% of their

income, followed by 25% of them invest 10-15%.

On the other hand, 21% if respondents invest more than 15% of their income, as they

expect of earning high returns from them.

17%

37%25%

21%

% of income investment

0-5%

5-10%

10-15%

>15%


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6) In which sector you mostly prefer to invest your money?options respondents % of respondents

Private sector 35 32%

Public sector 46 42%

Both 29 26%

total 110 100

Inference:-

From the above data, its clear that most of the respondents prefer and trust public

sector when compared to private sector.

Evidently, 42% of respondents prefer public sector whereas 32% are happy with

private sector. It can also be seen that 26% of them prefer both.

32%

42%

26%

preferred sector for investment

pvt. Sector

public sector

both


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7) For how long have you been investing in ULIPS:-Options respondents % of respondents

>2years 16 15%

2-5 years 38 36%

5-10 years 32 29%

>10 years 24 22%

Total 110 100

Inference:-

According to the data above, respondents have been investing in ULIPS since not for

a long time. It shows the lack of awareness among the people about ULIP plans.

The statistical data says that 36% of investors have been investing since 2-5 yrs, 29%of investors have been investing since 5-10 yrs. But there are investors who are

aware about ULIPs and have been investing since more than 10 yrs i.e. 22%.

15%

36%29%

22%

For how long investors have been investing in

ULIPs

>2yrs

2-5yrs

5-10yrs

>10yrs


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8) Why do you invest in ULIPS:options respondents % of respondents

Insurance-cum-invest.

Scheme

16 16%

Flexibility to choose/stop

premium payments

23 21%

Switch between various

funds

27 25%

Options to surrender 20 18%

Tax benefits 24 22%

Total 110 100

Inference:-

According to the above data, mostly investors invest in ULIPs because of switching

options, flexibility options and tax benefits i.e. 25%, 21% and 22% respectively.

As the market is so dynamic and volatile options like switching between funds i.e.

switching between equity or debt and flexibility of either continuing or stopping the

premiums lure the investors to opt for ULIP plans.

16%

21%

25%

18%

22%

Reasons for investing in ULIPs

insurance-cum-invest. Scheme

flexibility

switiching options

options to surrender

tax benefits


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9) What kind of investor are you:-options respondents % of respondents

Long term investor 36 33%

Short term investor 31 28%

High insurance 25 23%

Low insurance 18 16%

total 110 100

Inference:-

From the above data, it can be inferred that most of the respondents go for long

term investing i.e. 33%, whereas 28% go for short term investment. It is advisable to

go for long term investments when investing in ULIPs, if the investor wants to reap

the actual benefits.

33%

28%

23%

16%

kind of investor

long term investor

short term investor

high insurance

low insurance


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10)What category of fund in ULIP you prefer the most:-options respondents % of respondents

Equity funds 22 20%

Bond/fixed income funds 26 24%

Govt. securities 19 17%

Money market funds 18 16%

Balanced/hybrid funds 27 25%

total 110 100

Inference:-

According to the above data, it is inferred that mostly respondents prefer balanced

funds and bond funds i.e. 25% and 24% respectively.

Investors prefer balanced funds to be on the safe side with less risk .In balancedfunds part of the premium money is invested in equity and the other part on debt

funds as per to the investor.

But 20% of investors also prefer equity funds, as equity funds will give more returns

than debt funds, but will be the riskiest of all.

Money market funds and Gvt. Securities bagged 16% and 17% respectively

20%

24%

17%

16%

25%

Preferred category of fund

equity funds

bond funds

gvt. Securities

mny mkt funds

balanced funds


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11)Minimum expected return from ULIP plan:-options respondents % of respondents

5-10% 22 20%

10-15% 41 37%

15-20% 30 27%

>20% 17 16%

Total 110 100

Inference:-

According to the data, the minimum expected return investors have on their ULIP

plans is 10-15% i.e. 37%. 27% said they expect 15- 20%.

Therefore the average return on investment expected is between 10-20%.

Most consumers are willing to adapt to some amount of risk but still want someguaranteed returns. Therefore the bulk of investment should be made in the

balanced fund with 50% debt and 50% equity.

If company invests in debt market, the returns will be low. If the company invests in

equity market the returns will be high, but with high risk as well.

Therefore a combination of 2 is a wise decision.

20%

37%

27%

16%

minimum expected return

5-10%

10-15%

15-20%

>20%


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12)Are you satisfied with the funds taxes/expenses levied on ULIP:-options Respondents % of respondents

Highly satisfied 15 14%

Satisfied 31 28%

Neutral 19 17%

Unsatisfied 25 23%

Highly unsatisfied 20 18%

Total 110 100

Inference:-

According to the data, 28% of respondents are satisfied with the funds expenditure

so far. They say that in ULIP the fee deduction will be there in starting years of

policy, but gradually decreases thereafter.On the other hand, 18% are highly unsatisfied with the taxes. Here the company

needs to focus upon to retain its customers.

14%

28%

17%

23%

18%

satisfaction level on funds taxes/expenses

highly satisfied

satisfied

neutral

unsatisfied

highly unsatisfied


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13)Which type of ULIP policy you have and prefer:-options respondents % of respondents

Income fund 20 18%

Equity fund 26 24%

Security fund 28 25%

Balance fund 36 33%

total 110 100

Inference:-

As stated above earlier, that 25% of respondents preferred balanced funds to be on

the safer side. Thereby, most of the respondents i.e. 33% of investor prefer balance

fund ULIP policy.

25% and 24% of respondents preferred security and equity fund respectively.

18%

24%

25%

33%

prefeered type of ULIP policy

income fund

equity fund

security fund

balance fund


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14)In ULIP policy, how much coverage you expect from premium:-Options respondents % of respondents

5 times 18 16%

10 times 40 36%

15 times 36 33%

30 times 16 15%

Total 110 100

Inference:-

From the above data, it is inferred that 36% of respondents expect 10 times of

coverage from their premium paid.

Now this aspect and expectation of customers the company has to look after in

order to retain the potential investors.

16%

36%33%

15%

coverage expectation from premium

5 times

10 times

15 times

30 times


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15)In the past, where else have you invested mostly in:-options respondents % of respondents

Savings a/c & post office

schemes

21 19%

Bank deposits 23 21%

Life insurance policies 9 8%

Provident fund schemes 13 12%

Govt. securities 12 11%

Other instruments like

gold, real estate etc

32 29%

Total 110 100

Inference:-

According to the above data, 29% of respondents have mostly invested in other

instruments like real estate and gold. Moreover, 19% and 21% of respondents have

invested in savings a/c & PO schemes and bank deposits respectively.From the above data, we can also conclude that only 8% of respondents have

invested in life insurance policies, this shows the trust, awareness and expectation of

respondents towards life insurance policies. On the contrary, 29% of investors trust

more on gold and real estate for earning more money. This also shows the lack of

awareness among people about other investment avenues.

19%

21%

8%12%

11%

29%

other investmentssavings a/c & PO schemes

bank deposits

life insurance policies

provident fund schemes

gvt. Securities

other instruments like gold,real

estate etc


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16)Do you think ULIP is a risky investment:-options respondents % of respondents

Agree 43 39%

Highly agree 27 25%

Disagree 24 22%

Highly disagree 16 14%

total 110 100

Inference:-

According to the data, 39% of the respondents agree that ULIP is a risky investment

and 25% of respondents highly agree that ULIP is a risky investment. This might be

one of the reasons why investors dont invest in ULIPs and prefer other invest

avenues. But 14% of them disagree to the point that ULIP is risky rather they are

satisfied with ULIP policies.

39%

25%

22%

14%

ULIP is a risky investment

agree

highly agree

disagree

highly disagree


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17)According to you, which of the following risks mostly affects the funds performance:-options respondents % of respondents

Market risks 21 19%

Scheme risks 13 12%

Investment risks 48 44%

Business risks 19 17%

Political risks 9 8%

total 110 100

Inference:-

According to the data, it is found that 44% of respondents feel that ULIPs are risky

because of the investment risk involve in it. If the invest. advice goes wrong, the

fund has to suffer a lot. The invest. expertise of various funds are different and it is

reflected on the returns which they offer to investors.19% of respondents believe that it is because of the market risks the fu nds

performance goes down.

19%

12%

44%

17%

8%

Type of risk's affecting fund's

market risk

scheme risk

invest. Risk

business risk

political risk


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18) What according to you are the reasons people not investing in ULIPS:-Options respondents % of respondents

Too risky 33 30%

Lack of info. 22 20%

Dont know how to

invest.

30 27%

Dont know how ULIPS

works

25 23%

Total 110 100

Inference:-

According to the data, we can infer that 30% of respondents feel that its too risky to

invest in ULIPs.27% of respondents feel that many people dont know how to invest.But by analyzing the pie chart, it can be concluded that all the 4 reasons have a

played a strong role among people for not investing in ULIPs. Therefore its

important for the company to look after various strategies and measures to spread

awareness and information about ULIPs.

30%

20%27%

23%

Reasons for investing in ULIPs

too risky

lack of info.

don't know how to invest.

don't know how ULIP works


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19)Why do you think, ULIPs are not still a good option:-Options respondents % of respondents

Costlier than mutual fund 17 15%

High charges 21 19%

5-year locking period 13 12%

No guaranteed returns 31 28%

Lack of awareness 28 25%

Total 110 100

Inference:-

According to the above data, most of the respondents feel that ULIPs doesnt

guarantees returns and also lose lack of awareness among people. Moreover, ULIP

also have high charges in the forms of fee deductions from premium.

28% of investors opted for no guaranteed returns, 25% of investors opted for lack ofawareness, 19% of investors opted for high charges as the major reasons against

investing in ULIPs.

15%

19%

12%28%

25%

Why ULIPs not still a good option

costlier than mutual fund

high charges

5-year locking period

no guaranteed returns

lack of awraeness


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20)What factors do you consider, before investing in mutual funds or ULIPs:-options respondents % of respondents

Safety of principle 18 16%

High returns 40 37%

Maturity periods 28 25%

Terms and conditions 24 22%

Total 110 100%

Inference:-

According to the data, it is seen that 37% of respondents gives 1st

preference to the

high returns.25% of respondents feel maturity periods plays vital role.22% of

respondents considers terms & conditions important and rest 16% considers safety

of principle.

16%

37%25%

22%

Factors considered before investment

safety of principle

high returns

maturity periods

terms& conditions


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21)You have mostly bought life insurance policies from:-Options respondents % of respondents

LIC 58 53%

Future Generali 40 36%

Both 12 11%

Total 110 100%

Inference:-

According to the data, 53% of respondents have mostly bought life insurance

policies from LIC. 36% of respondents have mostly bought life insurance policies

from Future Generali. Interestingly, 11% of them have bought from both.

From this, we can easily conclude that customers mostly prefer and trust publicsectors for life insurance policies for obvious reasons.

53%36%

11%

mostly bought life insurance policies from

LIC

Future Generali

both


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22)Are you satisfied with your investment so far:-Options respondents % of respondents

Highly satisfied 16 14%

Satisfied 27 25%

Neutral 14 13%

Unsatisfied 33 30%

Highly unsatisfied 20 18%

Total 110 100%

Inference:-

According to the data, 30% of respondents are not satisfied with their investments

whereas 25% of them are satisfied. 13% are in neutral state i.e. they cannot

comment on their satisfaction levels as of now.

14%

25%

13%

30%

18%

Satisfaction level

highly satisfied

satisfied

neutral

unsatisfied

highly unsatisfied


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Chapter-5

Summary of Findings and Suggestions


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Findings

The following are the findings from the study:-

1) Most vital problem spotted was ignorance. Investors should be made aware about thebenefits of ULIP policies.

2) It has been found that less than 10% of Indian households have invested in mutual fundsand ULIPs. It has been seen that investors are holding back from putting their money

into ULIPs due to their perceived high risk and a lack of information on how ULIP works.

3) 39% of respondents agree that investment in ULIP is a risky investment, specificallyinvestment risk is involved.

4) 29% of respondents have mostly invested in instruments like gold, real estates etc.Many have invested in savings a/c, post office schemes and bank deposits. These might

be the reasons, investors abstaining from ULIPs.

5) Further the most attractive benefits people look forward are the ease of switchingbetween funds and tax benefits in ULIPs.

6) 44% of respondents between 26-35 years of age group invested in ULIPs. As a result,these young people can be induced to buy the insurance plans on the basis of its tax

saving nature and as an investment opportunity with high returns, which will be

beneficial for their spouse, children (if married).

7) 42% of investors prefer to invest in public sector. As a result, 53% of respondents havemostly bought their life insurance policies from LIC.

8) 25% and 24% of respondents prefer balanced funds and bond funds respectively to beon the safer side. Only 20% opted for equity funds, which gives high returns but has high

risks.

9) 30% are not satisfied with their investments so far.


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Suggestions

The suggestions to the findings of this survey are:-

1) Building trust by providing the customers with adequate knowledge about the companyand then the product is essential.

2) The private players should try to establish brand awareness and credibility amongcustomers to divert their interest from the clean sweep made by LIC.

3) Creating awareness among the school and college students by conducting variousprogrammes regarding savings will cater large no. of customers.

4) Certain discount charges should be made available because of the severe competitionwithin the private players as well as biggest threat posed by LIC.

5) Most of the people are still unaware about the ULIP plans and hence by making properpromotional strategy company can increase their sales.

6) In addition to above, first the people should identify their needs and then decide on thetype of policy they want to invest in order to get satisfaction. ULIP is a good investment

option that may give them higher returns.

7) Company can start offering jobs to eligible family members of deceased policyholders atthe time of claim as a part of CSR (corporate social responsibility) initiative.Today the key

to success in an industry plagued by losses is to be different and customer-oriented.

8) Offering ULIP schemes with very low premium to help people meet their financial goals.9) Company should offer multiple choices to the customer to have the flexibility to mix-

and- match according to their convenience.

10)Government should take effective measures towards removal of malpractices in privateinsurance sector which leads to insurance frauds and redlining.


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Bibliography

Books referred:-

1) C.R.Kothari, second edition 2004,Research Methodology: methods and techniques,New Age International (P) ltd, publishers, New Delhi.

2) E.Gordon & K.Natarajan,Edition 2010,Financial Markets & Services, Himalaya publishinghouse pvt. Ltd, Mumbai.

3) S.Kevin, Edition 2006,Security Analysis & Portfolio Management, PHI Learning Pvt ltd,New Delhi.

4) Gitam Journal of Management, April-June 2013, Gitam Institute of Management: GitamUniversity, Visakhapatnam.

Websites:-

www.wikipedia.com www.Future Generali.in www.investopedia.com www.mutual funds.com www.ULIP.com
http://www.wikipedia.com/http://www.wikipedia.com/http://www.future/http://www.investopedia.com/http://www.investopedia.com/http://www.mutual/http://www.mutual/http://www.investopedia.com/http://www.future/http://www.wikipedia.com/


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Annexure

Customer Preference on ULIPS

Note: - I Nandini Thakur, student of Gitam Institute of Management, GITAM University,Visakhapatnam as part of my project, doing research/survey on the above mentioned topic

among all the ULIP policyholders of FUTURE GENERALI. So, kindly fill in your respective

opinions.

Name:-

1) Age:-a) 18-25yrs b)26-35 yrs c) 36-49 yrs d)50-60 yrs e)>60 yrs

2) Occupation:-a) Public sector b) private sector c) retired d) student e) business f) others

3) Income:-

a) 10,000-20,000 b) 20,000-30,000 c) 30,000-40,000 d) >4000

4) Do you think life insurance is necessary?

a) Yes b) no

5) What % of your income do you invest?

a)0-5% b) 5-10% c) 10-15% d) >15%

6) In which sector you mostly prefer to invest your money?

a) private sector b) public sector c) both

7) For how long have you been investing in ULIPS?

a) 10 years

8) Why do you invest in ULIPS?

a) insurance-cum-investment scheme b) flexibility to choose/stop premium

payments

c) Switch between various funds d) options to surrender

e) Tax benefits


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9) What kind of investor are you?

a) Long-term investor b) short-term investor c) high insurance d) low insurance

10) Which category of fund in ULIP you prefer the most?

a) Equity funds b) bond /fixed income funds c) government securities

d) Money market funds e) balanced/hybrid funds

11) How much return do you expect from your ULIP plan?

a)5-10% b) 10-15% c) 15-20% d) >20%

12) Are you satisfied with the fund taxes/expenses being levied on ULIP?

a) Highly satisfied b) satisfied c) neutral

d) Unsatisfied e) highly unsatisfied

13) Which type of ULIP policy you have and prefer?

a) Income fund b) equity fundc) Security fund d) balance fund

14) In ULIP policy, how much coverage you expect from premium?

a) 5 times b) 10 times c)15 times d) 30 times

15) In the past, where else have you invested mostly in?

a) Savings a/c and post office schemes b) bank deposits c) life insurance policies

d) Provident fund schemes e) government securities

f) Other instruments like real estate, gold

16) Do you think ULIP is a risky investment?

a) Agree b) highly agree c)disagree d)highly disagree


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17) According to you, which of the following risks mostly affects the funds performance?

a) Market risks b) scheme risks c) investment risks d) business risks

e) Political risks

18) What according to you are the reasons people not investing in ULIPS?

a) Too risky b) lack of information

c) Dont know how to invest d) dont know how ULIPSworks

19) Why do you think, ULIPS are not still a good option?

a) Costlier than mutual fund b) high charges

c) 5-year locking period d) no guaranteed returns e) lack of awareness

20) What factor do you consider before investing in mutual fund or ULIPS?

A) Safety of principle b) high returns c) maturity periods

d) Terms and conditions

21) You have bought life insurance policies from:-

a) LIC b) Future Generali c) both

22) Are you satisfied with your investment so far?

a) Highly satisfied b) satisfied c) neutral d) unsatisfied

e) Highly unsatisfied

Reason, why??

future generali total insurance solutions

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