internship report on RIBL

8/9/2019 internship report on RIBL

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ReligareInsurance Broking

Ltd.Internship Project

2010

Jaspreet Kaur Sethi (4843)Shaheed Sukhdev College of Business Studies

Delhi University


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ACKNOWLEDGEMENTS

I would like to express my sincere thanks to Religare Insurance

Broking Ltd., Delhi for giving me the opportunity to carry out the

Summer Internship Program in their organization. The whole period

spent with the organization has been of immense learning experience

about the Indian Insurance Market.

Preparing a project of such a kind is not an easy task in itself and I am

sincerely thankful to all those people who help me lot, in preparing and

completing this project.

I am grateful to Religare Insurance Broking Ltd. who has given me this

opportunity to carry out the project Understanding the

functioning of an Insurance Broker .

I sincerely thank to Mr. Gaurav Gupta (ABVP, Religare Insurance

Broking Ltd., Delhi) for providing me this valuable learning

opportunity.

Finally I would like to thank Mr Sumit Verma my project supervisor

without his help and guidance the completion of this project would

have become difficult task.


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An overview about Insurance

Everyone is exposed to various risks. Future is very uncertain, butthere is way to protect ones family and make ones childrens futuresafe. Life Insurance companies help us to ensure that our familys

future is not just secure but also prosperous. Life Insurance is

particularly important if you are the sole breadwinner for your family.The loss of you and your income could devastate your family. Life

insurance will ensure that if anything happens to you, your loved oneswill be able to manage financially. This study titled Study of

Consumers Perception about Life Insurance Policies enables the Life

Insurance Companies to understand how consumers perception differs

from person to person. How a consumer selects, organizes andinterprets the service quality and the product quality of different LifeInsurance Policies, offered by various Life Insurance Companies.

Insurance is a tool by which fatalities of a small number arecompensated out of funds (premium payment) collected from

plenteous. Insurance companies pay back for financial losses arisingout of occurrence of insured events e.g. in personal accident policy

death due to accident, in fire policy the insured events are fire and

other allied perils like riot and strike, explosion etc. hence insurancesafeguard against uncertainties. It provides financial recompense for

losses suffered due to incident of unanticipated events, insured with inpolicy of insurance. Moreover, through a number of acts of parliament,

specific types of insurance are legally enforced in our country e.g. thirdparty insurance under motor vehicles Act, public liability insurance for

handlers of hazardous substances under environment protection Act.

Etc.


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WHAT IS INSURANCE

It is a commonly acknowledged phenomenon that there are countlessrisks in every sphere of life .for property, there are fire risk; for

shipment of goods. There are perils of sea; for human life there are

risk of death or disability; and so on .the chances of occurrences of theevents causing losses are quite uncertain because these may or may

not take place. Therefore, with this view in mind, people facingcommon risks come together and make their small contribution to the

common fund. While it may not be possible to tell in advance, which

person will suffer the losses, it is possible to work out how manypersons on an average out of the group, may suffer losses. When risk

occurs, the loss is made good out of the common fund .in this wayeach and every one shares the risk .in fact they share the loss by

payment of premium, which is calculated on the likelihood of loss .in

olden time, the contribution make the above-stated notion ofinsurance

DEFINITION OF INSURANCE

Insurance has been defined to be that in, which a sum of money as a

premium is paid by the insured in consideration of the insurers

bearings the risk of paying a large sum upon a given contingency. Theinsurance thus is a contract whereby:

a. Certain sum, termed as premium, is charged in consideration, b.

Against the said consideration, a large amount is guaranteed to bepaid by the insurer who received the premium, c. The compensationwill be made in certain definite sum, i.e., the loss or the policy amount

which ever may be, and d. The payment is made only upon acontingency

More specifically, insurance may be defined as a contact between twoparties, wherein one party (the insurer) agrees to pay to the other

party (the insured) or the beneficiary, a certain sum upon a givencontingency (the risk) against which insurance is required.


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TYPES OF INSURANCE

Insurance occupies an important place in the modern world because ofthe risk, which can be insured, in number and extent owing to the

growing complexity of present day economic system. The different

type of insurance have come about by practice within insurancecompanies, and by the influence of legislation controlling the

transacting of insurance business, broadly, insurance may be classifiedinto the following categories:

1. Classification from business point of view

a) Life insuranceb) General insurance

2. Classification on the basis of nature of insurance

a) Life insurance

b) Fire insurancec) Marine insurance

d) Social insurancee) Miscellaneous insurance

3. Classification from risk point of view

a) Personal insurance

b) Property insurancec) Liability insurance

d) Fidelity general insurance


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THE IMPORTANCE OF INSURANCE

Insurance benefits society by allowing individuals to share the risksfaced by many people. But it also serves many other important

economic and societal functions. Because insurance is available and

affordable, banks can make loans with the assurance that the loanscollateral (property that can be taken as payment if a loan goes

unpaid) is covered against damage. This increased availability of credithelps people buy homes and cars. Insurance also provides the capital

that communities need to quickly rebuild and recover economically

from natural disasters, such as tornadoes or hurricanes. Insuranceitself has become a significant economic force in most industrialized

countries. Employers buy insurance to cover their employees againstwork-related injuries and health problems. Businesses also insure their

property, including technology used in production, against damage and

theft. Because it makes business operations safer, insuranceencourages businesses to make economic transactions, which benefits

the economies of countries. In addition, millions of people work forinsurance companies and related businesses. In 1996 more than 2.4

million people worked in the insurance industry in the United Statesand Canada. Insurance as an investment that offers a lot more in

terms of returns, risk cover & as also that tax concessions & added

bonuses Not all effects of insurance are positive ones. The possibilityof earning insurance payments motivates some people to attempt to

cause damage or losses. Without the possibility of collecting insurancebenefits, for instance, no one would think of arson, the willful

destruction of property by fire, as a potential source of money.


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THE INSURANCE INDUSTRY TODAY

Since the 1970s, the insurance business has grown dramatically andundergone tremendous changes. As a result of the deregulation of

financial services businesses including insurance, banking, and

securities tradingthe roles, products, and services of these formerlydistinct businesses have become blurred. For instance, citizens in the

U.S. state of California voted in 1988 to allow banks to sell insurancein that state. In Canada, banks may also soon be allowed to sell

insurance. Advances in communications technology have also allowed

traditionally distinct financial businesses to keep instantaneous track ofdevelopments in other businesses and compete for some of the same

customers. Some insurance companies now offer deposit accounts andmortgages. In the United States, life insurance companies now sell

more pension plans and other asset management services than they

do conventional life insurance. Developments in computer technologythat have given insurance providers the ability to quickly access and

process information have allowed them to custom-design policies to fitthe needs of individual customers. But the increasing complexity of

policies has also made some aspects of buying and selling insurancemore difficult. In addition, improvements in geological and

meteorological technology have the potential to change the way

property insurers calculate risks of damage. For example, as scientistsimprove their abilities to predict severe weather patterns, such as

hurricanes, and geological disturbances, such as earthquakes, insurersmay change how they provide protection against losses from such

events


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EVOLUTION OF INSURANCE IN INDIA

The marine insurance is the oldest form of insurance. If we traceIndian history there are evidence that marine insurance was practiced

here about three thousand years ago. The code of Manu indicates that

there was the practice of marine insurance carried out by the tradersin India with those of Sri Lanka; Egypt and Greece .it is wonderful to

see that Indians had even anticipated the doctrine of average andcontribution. Fright was fixed according to season and was then very

much at the mercy of the wind and other elements. Travelers by sea

and land were very much exposed to the risk of losing their vesselsand merchandise because of piracy on open seas and highway robbery

of caravans was very common. The practice of insurance was verycommon during the rule of Akbar to Aurangzeb, but the nature and

coverage of the insurance in this period is not well known. It was the

British insurer who introduced general insurance in India in themodern form. The British opened general insurance in India around

the year 1700 .the first company known as the sun insurance officewas set up in Calcutta in the year 1710. This was followed by several

insurance companies like London assurance and royal exchangeassurance (1720), Phoenix Assurance Company (1782). Etc. General

insurance business in the country was nationalized with effect from 1st

January 1973 by the General Insurance Business (Nationalization) Act,1972. More than 100 non-life insurance companies including branches

of foreign companies operating within the country were amalgamatedand grouped into four companies, viz., the National Insurance

Company Ltd., the New India Assurance Company Ltd., the OrientalInsurance Company Ltd., and the United India Insurance CompanyLtd. with head offices at Calcutta, Bombay, New Delhi and Madras,

respectively.

Life insurance in the current form came in India from united kingdom

with the establishment of a British firm, oriental life assurancecompany in 1818 followed by Bombay life assurance company in 1823,

the madras equitable life insurance society in 1829 and oriental lifeassurance company in 1874.prior to 1871, Indian lives were treated as

sub standard and charged an extra premium of 15% to 20%. Bombaymutual life assurance society, an Indian insurer that came in toexistence in 1871, was the first to cover Indian lives at normal rates.

The Indian insurance company Act 1923 was enacted inter alia, toenable the government to collect statistical information about life and

nonlife insurance business transacted in India by Indian and foreigninsurer, including the provident insurance societies. The first half of

the 20th century marked by two world war, the adverse affects of the


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World War I and World War II on the economy of India, and inbetween them the period of world wide economic crises triggered by

the Great depression. The first half of the 20th century was alsomarked by struggles for Indias independence. The aggregate effect of

these events led to a high rate of bankruptcies and liquidation of life

insurance companies in India. This had adversely affected the faith ofthe general public in the utility of obtaining life cover In this

background, the Parliament of India passed the Life Insurance of IndiaAct on 19th June 1956, and the Life Insurance Corporation of India

was created on 1st September, 1956, by consolidating the life

insurance business of 245 private life insurers and other entitiesoffering life insurance services.

Since 1972, the insurance sector has been totally under the control ofgovernment of India through LIC and GIC and its subsidiaries. As a

result, revenue of both of them increased in the last years .the amount

of savings pooled by LIC increased from Rs.2704 crores in 1974 to Rs .57670 in 1994 with an annual growth rate of 16.53% .similarly

premium underwritten by GIC rose from 280 crores in 193 to 7647crores in 1998 showing an annual growth rate of 25.18%. Despite

increase in premium collected by both LIC and GIC their wereinefficiency and red tapeisum creeped in to the insurance sector. Apart

from that a major policy shift by the Narasimha Rau government

during 1990s.the Indian economy opened for foreign competition .Inthis background The government of India in 1993 had set-up a high

powered committee by R.N Malhothra ,former governor reserve bankof India, to examine the structure of Indian insurance sector and

recommended changes to make it more efficient and competitivekeeping in view structural changes in other part of the financial systemof the country. Insurance sector has been opened up for competition

from Indian private insurance companies with the enactment ofInsurance Regulatory and Development Authority Act, 1999 (IRDA

Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory

and Development Authority (IRDA) was established on 19th April 2000to protect the interests of holder of insurance policy and to regulate,

promote and ensure orderly growth of the insurance industry. IRDAAct 1999 paved the way for the entry of private players into the

insurance market, which was hitherto the exclusive privilege of publicsector insurance companies/ corporations.


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EVOLUTION OF INSURANCE ORGANIZATION

With a view to serve the society, the insurance organizations havebeen developed in different forms with innovation of insurance practice

for social welfare and development; some of these forms are outlined

here.

a) Self-insuranceThe arrangement in which an individual or concern sets up a private

fund to meet the future risk. If some losses happened in the future the

firm meets the loss out of the fund. While it may be called selfinsurance it is not a single matter of fact, insurance at all because

there is no hedge, no shifting, or distributing the burden of risk amonglarger Persons. It is merely a provision to meeting the unforeseen

event. Here the insured become the insurer for the particular risk. But

it can be effectively worked only when there is wide distribution ofrisks subjected the same hazard.

b) Partnership

A partnership firm may also carry on the insurance business for thesake of profit. Since it is not an entity distinct from the persons

comprising it, the personal liability of partners in respect to the

partnership debts is unlimited. In case of huge loss the partners mayhave to pay from their own personal funds and it will not be profitable

to them to starts insurance business .in the early period before theadvent of joint stock companies many insurance undertakings were

partnership firms or unincorporated companies

c) Joint stock companies

The joint stock companies are those, which are organized by theshareholders who subscribe the necessary capital to start the business.

These are formed for earning profits for the stockholders who are the

real owners of the companies. The management of a company isentrusted to a board of directors who is elected by the shareholders

from amongst themselves. The company can operate insurancebusiness and policyholders have nothing to do with the management

of the concern. But in life insurance it is the practice to share certainportion of profit among the certain policyholders.


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d) Mutual fund companies The mutual fund companies are co-operative association formed for the purpose of effecting insurance on

the property of its members. The policyholders are themselves theshareholders of the companies each member is insured as well as

insured. They have power to participate in management and in the

profit sharing to the full extent. Whenever the income is more than theexpenses and claims, it is accumulated I the form of saving and is

entitled in reducing the rate of premium. Since the insured areinsurers also, they always try to reduce the management expenses

and to keep the business at sound level.

e) Co-operative insurance organizations Cooperative insurance

organizations are those concerns, which are incorporated andregistered under Indian cooperative societies Act. The concerns are

also called co operative insurance societies these societies like mutual

fund companies are non profit organization .the aim is to provideinsurance protection to its members at the lowest reasonable net

cost .the Indian insurance Act. 1938, has provided special provisionsfor the co-operative insurance societies, but after nationalization the

societies have ceased to exist.

f) Lloyds Association

Lloyds association is one of the greatest insurance institutions in the

world. Taking its name from the coffee house Lloyd whereunderwriters assembled to transact business and pick-up news. The

organization traces its origins to the latter part of the seventeenthcentury .so it is the oldest insurance organization in existing form inthe world. In 1871,Lloyds Act was passed incorporating the members

of the association into a single corporate body with perpetualsuccession and a corporate seal .the powers of Lloyds corporation were

extended from the business of marine insurance to the other insurance

and guarantee business. The Lloyds Association also publishes, Lloydslist and register of shipping for the information of insuring public and

the insurers


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g) State Insurance

The government of a nation, some times, owns the insurance and runsthe business for the benefit of the public. The sate insurance is defined

as that insurance which is under public sector. In Brazil, Japan and

Mexico, the insurance are largely nationalized. Previously, the stateundertook only those insurances, which were regarded as vital for the

national interest.

INSURANCE SECTOR REFORMS

Having looked at the insurance sector, the efforts made by the

government to make the industry more dynamic and customerfriendly. To begin with, the Malhotra committee was set up with the

objective of suggesting changes that would achieve the much required

dynamism. The Malhotra Committee Report In 1993, MalhotraCommittee, headed by former Finance Secretary and RBI Governor R.

N. Malhotra, was formed to evaluate the Indian insurance industry andrecommend its future direction. In 1994, the committee submitted the

report and gave the following recommendations: StructureGovernment 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 independentcorporations All the insurance companies should be given greater

freedom to operate

Competition Private Companies with a minimum paid up capital ofRs.1bn should be allowed to enter the industry No Company shoulddeal in both Life and General Insurance through a single entity Foreign

companies may be allowed to enter the industry in collaboration withthe 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 stat Regulatory BodyThe Insurance Act should be changed. An Insurance Regulatory body

should be set up. Controller of Insurance (Currently a part from theFinance Ministry) Investments Mandatory Investments of LIC Life Fund

in government securities to be reduced from 75% to 50%. GIC and itssubsidiaries are not to hold more than 5% in any company (Therecurrent holdings to be brought down to this level over a period of

time). Customer Service LIC should pay interest on delays inpayments beyond 30 days. Insurance companies must be encouraged

to set up unit linked pension plans. Computerization of operations andupdating of technology to be carried out in the insurance industry.

Overall, the committee strongly felt that in order to improve the


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customer services and increase the coverage of the insurance industryshould be opened up to competition. But at the same time, the

committee felt the need to exercise caution as any failure on the partof new players could ruin the public confidence in the industry.


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Function of an insurance broker

An insurance broker is basically a "middle man" (or woman!) who will

find insurance for you. The thing to keep in mind with any broker isthat he or she will only be working with certain insurance companies --

usually those who will give them the best commission. Therefore, theydon't work with all the available insurance companies, but only a selectfew. So, if you want the best deal, you may have to work with more

than one broker, or even do some legwork yourself.

The web makes that easy; you can get quotes online directly.

As far as insurance goes, it is "risk management" for you. You are

paying for a service that both you and the insurer are hoping you'llnever need!

In some cases, you are required to have insurance by law. Your car

insurance is an example of this. In other cases, you are required to

have insurance as a condition of a loan, like your mortgage.

In all cases where you have insurance, you are protecting an asset,although in some cases that is more obvious than others. With life

insurance, you are protecting your family or inheritors from the loss of

you and your income. With health insurance, you are protecting yourincome from the cost of healthcare. With disability insurance, you are

protecting your ability to generate income.

This is even true with health, life and disability insurance. With life

insurance, you are protecting your income and your family ordependants.


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Market analysis

A detailed study was preformed on the market composition of Religare

Insurance Broking Ltd.

The following findings were obtained.

A large chunk of the premium comes from GMC which makes upa chunk of 66% of the total premium

With quite a few companies we have brokered a variety of

insurance product genres but none of them have that high apremium rate

Other genres like Fire and motor are large in the number of

policies sold, but do not have that high a rate of premium. There are many genres we have not tapped into.. For e.g.

1. SFSP

2. EDLI3. Marine policies

4. B&PEven though we have provided these genres..

Their percentage intake is only 6%.. Which is very little.These genres can be approached to increase business intake.


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P re m iumG P A

G M C

G P A

Fi re

B urg lary

F i re

B urg lary

B urg lary

F i re

Moto r

B urg lary

F i re

F i re

C as h

Moto r

Mo to r

F i re

Mo to r

Mo to r


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About Religare Insurance Broking Ltd

Parent Company Religare

Name - Religare is a Latin word that translates as 'to bind together'.This name has been chosen to reflect the integrated nature of the

financial services the company offers.

Symbol - The Religare name is paired with the symbol of a four-leaf

clover. Traditionally, it is considered good fortune to find a four-leaf

clover as there is only one four-leaf clover for every 10,000 three-leaf

clovers found.

For us, each leaf of the clover has a special meaning. It is a symbol of

Hope. Trust. Care. Good Fortune.

Vision - To build Religare as a globally trusted brand in the financial

services domain and present it as the Investment Gateway of India'.

Mission - Providing complete financial care driven by the core values

of diligence and transparency.

Brand Essence - Core brand essence is Diligence and Religare is

driven by ethical and dynamic processes for wealth creation.


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Religare Insurance Broking Limited.

Religare Insurance Broking Limited (RIBL), a 100% subsidiary of

Religare Enterprises Limited is one of Indias leading insurance brokingfirms, with a strong retail network in the country. The company holds

a composite brokers license operating in the Life, General andReinsurance domains

An insurance portfolio is designed from a choice of more than 3000 life

and general insurance products & plans from more than 30 companies.

This is one easy window for any brand of insurance, any kind of cover,offers tailor made insurance solutions with not just the right kind of

cover but also the right mix of cover.

RIBL not only provides customized solutions to individual clients, but

also to some of the leading corporate houses and institutions acrossthe country. Our team across the country is driven by the core

philosophy of creating and delivering value to its customers. Ourstrengths are a team of passionate professionals, a robust IT

infrastructure and strong risk analysis teams adept at identifying &

analyzing your risks and providing you with tailor made solutions.

Vision and Mission

Vision

"To be India's most trusted insurance partner"

Mission

"To create and institutionalize an ethical, process driven, advisory led

approach, backed by the right expertise & sharp insights,

benchmarked against global best practices"


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Religare as an Insurance Broker

Religare Insurance Broking Limited, a wholly owned subsidiary of

Religare Enterprises Limited is one of India's leading insurance brokingfirms, with a strong retail network in the country. The company holds

a composite broker's license for operating in the Life, General andReinsurance domains.

As an Insurance Broker, Religare offers you a single window for

everything you need to insure. Our domain knowledge, backed by ourexpertise and multi-brand multi-product business model, ensures you

get tailor-made insurance solutions. We design your insuranceportfolio from diversified life and general insurance products and plans

from over 30 companies. So you get both the right kind and the rightmix of cover. All under one roof

Freedom of choice to the customer

Represents clients to insurance companies Gets the best deals to the clients - Cost, Coverage & Service

Technical and functional expertise

Proactive assistance and claims management

Professional and unbiased approach

Services the client at zero cost


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Our Client Interface

Corporate Spectrum

Developing customized insurance solutions for local &multinational corporate clients.

Risk Management onsite/offsite Assessments

Claims Management

Centralized servicing

Underwriter Due Diligence

Industry specific experts

Specialty Risk Coverage

Reinsurance

National and International

Retail NetworkOffering complete range of personal insurance products

through the Nationwide Network

Life Insurance

Pure Insurance Solutions

Investment Linked Plans

Guaranteed Saving Plans

General Insurance

Motor Insurance

Health Insurance Program

Travel Protection Schemes

Package Policies for SMEs Financial Wellness

Child Plans

Protection Plans

Retirement Plans


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Risk Placement Process


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Our Value Proposition

Strong Domain Expertise

Rich domain knowledge and Industry expertsComprehensive Risk Portfolio Management

Expertise to meet all your Insurance needsFlexibilityMarket understanding, proactive and customer centric

InfrastructureHuman, technical, physical presence, CRM

Quality

Best business practices and highest quality serviceStrategic Partnerships

Alliance with global and national players to get you the best deals


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Why Religare

Composite Insurance Broker

IRDA approved licensor working since November 2006. Dealing inGeneral & Life Insurance for both commercial and retail sectors.

WorksitesDedicated Insurance helpdesks to cater client related problems both

before and after sales.

Corporate Insurance ServicesTechnical and functional expertise to manage corporate business in all

major locations. Mandated broker for a number of large corporateclients.

Diversification

RIBL represents a diversed bouquet of services spread acrosscorporate, retail and institutional spectrum.

Comprehensive risk management portfolio

We have expertise to meet all your insurance needs and handle yourinsurance portfolio effeciently.

Strategic PartnershipWe have alliances with global and national players to get you the best

deals at any given point of time.

Customer - centric companyOur focus is to provide the best in the market services which does not

build a hole in your pocket.


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Corporate Clients

Life Insurance

ICICI Prudential Life Insurance Co. Ltd.Birla Sun Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd.

Bajaj Allianz Life Insurance Co. Ltd.Life Insurance Corporation of India

Aviva Life Insurance Co. India Pvt. Ltd.Met Life India Insurance Co. Pvt. Ltd.

HDFC Standard Life Insurance Co. Ltd.SBI Life Insurance Co. Ltd.

ING Vysya Life Insurance Co. Ltd.

Tata AIG Life Insurance Co. Ltd.Reliance Life Insurance Co. Ltd.

General Insurance

ICICI Lombard General Insurance Co. Ltd.Royal Sundaram Alliance Insurance Co. Ltd.

Cholamandalam MS General Insurance Co. Ltd.Bajaj Allianz General Insurance Co. Ltd.

Tata AIG General Insurance Co. Ltd.

IFFCO Tokio General Insurance Co. Ltd.

Star Health & Allied Insurance Co. Ltd.HDFC General Insurance Co. Ltd.Reliance General Insurance Co. Ltd.

National Insurance Co. Ltd.

New India Assurance Co. Ltd.United India Insurance Co. Ltd.

Oriental Insurance Co. Ltd.


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References

Throughout the span of creating this report, I have taken the help ofvarious sources. Some of these sources were used for literary ways,

others simply for support and knowledge enrichment. Either ways, I am

sincerely grateful.

1. Www. Wikipedia .com

2. Www. Google.com

3. Www. NHPC. Com4. Www. Religare.com.in

5. Www. Insurancefordummies .com6. Www. Ask.com

7. Www. Cluemein.com


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Thank you

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