Project Report on RLI

8/9/2019 Project Report on RLI

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Project Report on

Comparative study of

With other

insurance Brand

SUBMITTED FOR

Partial fulfillment of the requirements of two years full timePost Graduate Diploma in Management (PGDM)


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SCHOOL OF BUSINESS

MANAGEMENT

Submitted by

Tarun Kumar Pandit

2K9PGD006

Company Guide Faculty Guide

Ms. Jyoti Kharwar Prof. Umesh Kumar

( Training Manager) (H.O.D., VSBM)Prof. Neeraj Vijay Saraswat

(Registrar)


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Table of Contents

Contents

Preface ..................................................................................................................... 4

Certificates ...............................................Error! Bookmark not defined.

Acknowledgement .............................................................................................. 5

Executive Summary ............................................................................................ 6

Index ......................................................................................................................... 7


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Preface

The liberalization of the Indian insurance sector has been the

subject of much heated debate for some years. The policy makers

where in the catch 22 situation wherein for one they wanted

competition, development and growth of this insurance sector which is

extremely essential for channeling the investments in to the

infrastructure sector. At the other end the policy makers had the fears

that the insurance premium, which are substantial, would seep out of

the country; and wanted to have a cautious approach of opening for

foreign participation in the sector.

As one of the rare occurrences, the entire debate was put on the

back burner and the IRDA saw the day of the light thanks to the

maturing polity emerging consensus among factions of different

political parties. Though some changes and some restrictive clauses as

regards to the foreign participation were included, the IRDA has

opened the doors for the private entry into insurance.

Whether the insurer is old or new, private or public, expanding

the market will present multitude of challenges and opportunities. But

the key issues, possible trends, opportunities and challenges that

insurance sector will have still remains under the realms of the

possibilities and speculation.


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Acknowledgement

My sincere thanks are due to the management of Reliance Life

Insurance Co. Ltd for having provided the summer internship

opportunity.

I take this opportunity to express my sincere gratitude and

profound regards to Prof. Umesh Kumar (HOD) and Prof. Neeraj Vijay

Saraswat (Registrar) my faculty guide, who has always given me

motivational boost to go and perform. I would further like to thank him

for his persistence to listen to my problems and to give apart solutions.

I would like to thank my company guide Ms. Jyoti Kharwar

(Training Manager) who in spite of his busy schedule has cooperated

with me continuously and indeed, his valuable contribution and

guidance have been certainly indispensable for my project work.

I would also like to thank Mr. Sanjay Sinha (Branch Manager), Mr.

Rakesh Kumar Mondal (Sales Manager), for their invaluable advice andenlightening my path at every stage of my project and all the senior

executives and every associate of Reliance Life Insurance Co. Ltd,

without their cooperation this project would have been impossible. Last

but not the least, I feel indebted to all those person and organization

who have provided help directly or indirectly in successful completion

of this study.


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Index

Introduction ............................................................................................................................................................... 8

Meaning of Insurance........................................................................................................................................ 9

Importance of Insurance .............................................................................................................................. 10

Meaning of Life Insurance............................................................................................................................ 11

History of Life Insurance .............................................................................................................................. 13

Key Features of Life Insurance .................................................................................................................. 17

Benefits of Life Insurance............................................................................................................................. 19

Role of Life Insurance in the Growth of Economy............................................................................ 23

Objectives ................................................................................................................................................................. 24

Research Design......................................................................................................................................................... 25

Company Profile.................................................................................................................................................... 26

Company Products............................................................................................................................................... 28

Reliance Policies.................................................................................................................................................... 30

SWOT Analysis ....................................................................................................................................................... 34

Marketing Strategies of the RLIC................................................................................................................... 36

Research Methodology....................................................................................................................................... 37Comparative Analysis.............................................................................................................................................. 40

Findings and Interpretations............................................................................................................................... 49

Results ............................................................................................................................................................................ 60

Suggestions and Recommendations................................................................................................................. 61

Conclusion .................................................................................................................................................................... 62

Limitations.................................................................................................................................................................... 63

Bibliography/References ...................................................................................................................................... 64

Annexure Questionnaire........................................................................................................................................ 65


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Introduction

Insurance is an upcoming sector, in India the year 2000 was a

landmark year for life insurance industry, in this year the life insurance

industry was liberalized after more than fifty years.

Insurance sector was once a monopoly, with LIC as the only

company, a public sector enterprise. However, nowadays the market

opened up and there are many private players competing in the

market. There are fifteen private lives insurance companies has entered

the industry.

After the entry of these private players, the market share of LIC

has been considerably reduced. In the last five years the private players

is able to expand the market (growing at 30-34% per annum) and has

improved their market share to 28%.

For the past five years, private players have launched many

innovations in the industry in terms of products, market channels and

advertisement of products, agent training and customer services etc.


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Importance of Insurance

Insurance constitutes one of the major segments of the financial

market. Insurance services play predominant role in the process of

financial intermediary. Today insurance industry is one of the most

growing sectors in India. There is lot of potential in the Indian Insurance

Industry.

There are many issues, which require study. The scope of the

study of insurance industry of India would be very great as there are

ongoing developments in the industry after the opening of the sector.

The major issue right now is the hike in FDI (Foreign Direct

Investment) limit from 26% to 49% in the insurance sector.

Government may in near future allow 49% FDI in Insurance. This would

lead to more capital inflow by foreign partners.

Another major issue is the effects on LIC after the entry of private

players in the market. Though market share of LIC has been affected, ithas improved in terms of efficiency.

There are number of other hot topics like penetration of Health

Insurance, Rural marketing of insurance, new distribution channels,

new product ranges, insurance brokers regulation, incentive scheme of

development officers of LIC etc. Therefore, it offers lot of scope for

studying the insurance industry.

Right now, the insurance industry has great opportunities in a

country like India or China which huge population. In addition, the

penetration of insurance in India is very low in both life and non-life

segment so there is lot potential to be tapped.


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Meaning of Life Insurance

There are three parties in a life insurance transaction: the insurer, the

insured, and the owner of the policy (policyholder), although the owner

and the insured are often the same person. Another important person

involved in a life insurance policy is the beneficiary. The beneficiary is

the person or persons who will receive the policy proceeds upon the

death of the insured.

Life insurance may be divided into two basic classes term and

permanent.

I. Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium. The policy does

not accumulate cash value.

II. Permanent life insurance is life insurance that remains in forceuntil the policy matures, unless the owner fails to pay the

premium when due.

III. Whole life insurance provides for a level premium, and a cashvalue table included in the policy guaranteed by the company.

The primary advantages of whole life are guaranteed death

benefits; guaranteed cash values, fixed and known annual

premiums, and mortality and expense charges will not reduce the

cash value shown in the policy.

IV. Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greater

flexibility in premium payment and the potential for a higher

internal rate of return. A universal life policy includes a cash

account. Premiums increase the cash account.


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If you want insurance protection only, and not a savings and

investment product, buy a term life insurance policy.

If you want to buy a whole life, universal life, or other cash value

policy, plan to hold it for at least 15 years.

Canceling these policies after only a few years can more than

double your life insurance costs. Check the National Association of

Insurance Commissioners website (www.naic.org/cis) or your local

library for information on the financial soundness of insurance

companies.


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History of Life Insurance

Risk protection has been a primary goal of humans and

institutions throughout history. Protecting against risk is what

insurance is all about.

Over 5000 years ago, in China, insurance was seen as a

preventative measure against piracy on the sea. Piracy, in fact, was so

prevalent, that as a way of spreading the risk, a number of ships would

carry a portion of another ship's cargo so that if one ship was captured,

the entire shipment would not be lost.

In another part of the world, nearly 4,500 years ago, in the

ancient land of Babylonia, traders used to bear risk of the caravan trade

by giving loans that had to be later repaid with interest when the goods

arrived safely. In 2100 BC, the Code of Hammurabi granted legal status

to the practice. It formalized concepts of bottomry referring to vessel

bottoms and respondentia referring to cargo. These provided the

underpinning for marine insurance contracts. Such contracts containedthree elements: a loan on the vessel, cargo, or freight; an interest rate;

and a surcharge to cover the possibility of loss. In effect, ship owners

were the insured and lenders were the underwriters.

Life insurance came about a little later in ancient Rome, where

burial clubs were formed to cover the funeral expenses of its members,

as well as help survivors monetarily. With Rome's fall, around 450 A.D.,

most of the concepts of insurance were abandoned, but aspects of itdid continue through the Middle Ages, particularly with merchant and

artisan guilds. These provided forms of member insurance covering

risks like fire, flood, theft, disability, death, and even imprisonment.


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During the feudal period, early forms of insurance ebbed with the

decline of travel and long-distance trade. However, during the 14th to

16th centuries, transportation, commerce, and insurance would again

reemerge.

Insurance in India can be traced back to the Vedas. For instance,

yogakshema, the name of Life Insurance Corporation of India's

corporate headquarters, is derived from the Rig Veda. The term

suggests that a form of "community insurance" was prevalent around

1000 BC and practiced by the Aryans.

Moreover, similar to ancient Rome, burial societies were formedin the Buddhist period to help families build houses, and to protect

widows and children.

Modern Insurance

Illegal almost everywhere else in Europe, life insurance in England

was vigorously promoted in the three decades following the Glorious

Revolution of 1688. The type of insurance we see today owes its rootsto 17th century England. Lloyd is of London, or as they were known

then, Lloyd's Coffee House, was the location where merchants, ship

owners and underwriters met to discuss and transact business deals.

While serving as a means of risk-avoidance, life insurance also

appealed strongly to the gambling instincts of England's burgeoning

middle class. Gambling was so rampant, in fact, that when newspapers

published names of prominent people who were seriously ill, bets wereplaced at Lloyds on their anticipated dates of death. Reacting against

such practices, 79 merchant underwriters broke away in 1769 and two

years later formed a New Lloyds Coffee House that became known

as the real Lloyds. Making wagers on peoples deaths ceased in 1774

when parliament forbade the practice.


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Insurance moves to America

The U.S. insurance industry was built on the British model. The year

1735 saw the birth of the first insurance company in the American

colonies in Charleston, SC. The Presbyterian Synod of Philadelphia in

1759 sponsored the first life insurance corporation in America for the

benefit of ministers and their dependents. And the first life insurance

policy for the general public in the United States was issued, in

Philadelphia, on May 22, 1761.

But it wasn't until 80 years later (after 1840), that life insurancereally took off in a big way. The key to its success was reducing the

opposition from religious groups.

In 1835, the infamous New York fire drew people's attention to the

need to provide for sudden and large losses. Two years later,

Massachusetts became the first state to require companies by law to

maintain such reserves. The great Chicago fire of 1871 further

emphasized how fires can cause huge losses in densely populatedmodern cities. The practice of reinsurance, wherein the risks are spread

among several companies, was devised specifically for such situations.

With the creation of the automobile, public liability insurance, which

first made its appearance in the 1880s, gained importance and

acceptance?

More advancement was made to insurance during the process ofindustrialization. In 1897, the British government passed the

Workmen's Compensation Act, which made it mandatory for a

company to insure its employees against industrial accidents.


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Key Features of Life Insurance

Nomination: - When one makes a nomination, as the

policyholder you continue to be the owner of the policy and the

nominee does not have any right under the policy so long as you

are alive. The nominee has only the right to receive the policy

monies in case of your death within the term of the policy.

Assignment: - If your intention is that your policy monies should

go only to a particular person, you need to assign the policy in

favor of that person.

Death Benefit: - The primary feature of a life insurance policy is

the death benefit it provides. Permanent policies provide a death

benefit that is guaranteed for the life of the insured, provided the

premiums have been paid and the policy has not been

surrendered.

Cash Value: - The cash value of a permanent life insurancepolicy is accumulated throughout the life of the policy. It equals

the amount a policy owner would receive, fter any applicable

surrender charges, if the policy were surrendered before the

insured's death.

Dividends: - Many life insurance companies issue life insurance

policies that entitle he policy owner to share in the company's

divisible surplus.

Paid-Up Additions: - Dividends paid to a policy owner of a

participating policy can be used in numerous ways, one of which


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is toward the purchase of additional coverage, called paid-up

additions.

P

olicy Loans: - Some life insurance policies allow a policy ownerto apply for a loan against the value of their policy. Either a fixed

or variable rate of interest is charged. This feature allows the

policy owner an easily accessible loan in times of need or

opportunity.

Conversion from Term to Permanent: - When in need of

temporary protection, individuals often purchase term life

insurance. If one owns a term policy, sometimes a provision isavailable that will allow her to convert her policy to a permanent

one without providing additional proof of insurability.

Disability Waiver of Premium: - Waiver of Premium is an

option or benefit that can be attached to a life insurance policy at

an additional cost. It guarantees that coverage will stay in force

and continue to grow.


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Benefits of Life Insurance

Protection againstrisk of untimely death

Life insurance is a product, which offers protection against the

risk of death the full sum assured is made available under a life

assurance policy, whereas under other savings schemes, the total

accumulated savings alone will be available.

Protection during old age

Life insurance can also be used as a means of saving for ones

future. There are a number of life insurance policies, which in additionto life cover also provide the means of investing ones income. The sum

as per the policy will be received only after a period of time. This

amount thus provides for the old age.

Forced savings

Payment of life insurance premiums is compulsory and

becomes a habit. Savings in other scheme can be easily withdrawn and

may be used for less worthy purpose. Termination of a life insurancepolicy by the policyholder usually results in substantial loss in benefits

under the policy to the policyholder. One is thus encouraged to save

and keep ones policy alive.

Educational requirements and charity

The object of insurance may be to serve as a security to

educational funds in respect of loans advanced for educational purpose

or to provide donations to charitable institutions like hospital and

school.


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Nomination and assignmentThe life insured can name the person or persons to whom the

policy money would be payable in the event of his death .the proceeds

of a life insurance policy can be protected against the claims of thecreditors of the life insured by effecting a valid assignment of the

policy. The beneficiaries are fully protected from creditors expect to the

extent of any interest in the policy retained by the insured.

Marketability and suitability for borrowing

After 3 years, if the policyholder finds that he is unable to

continue payment of premiums he can surrender a policy for a cash

sum. A life insurance policy is accepted as a security for a commercialloan.

Loans from the insurance company

A policy holder can take a loan from his insurance company

against the security of his life insurance policy provided the terms of

the terms of his policy allow such a loan. This loan can be taken usually

after a period of 3 years from commencement of the policy and is a

percentage of its surrender value.

Investment options

The unit link products gives comprehensive insurance solutions

that cater to an individuals dual need of earning potentially high

returns as well as stay for life. Thus there is an option to invest money

in the products that combine the best of insurance and investment. In a

volatile market conditions it is possible to secure both as one can hedge

the investment with saver investment vehicles that provide adiversified portfolio.

Tax benefitsThe Indian income tax act provides tax concessions to the

policyholder both on payment of premium and on the maturity


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amount. Under sec 88 the tax benefits on premium paid by an

individual for life insurance policies on his own life\on the life of spouse

\children minor or major, including married daughters.

Reliance Life

Insurance


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Protection to wife and children

Under sec 6 of the married womens property act if a married

man takes a policy of life insurance on his own life and expenses on

the face of it to be for the benefit of his wife or of his wife and childrenor any of them, then it shall be deemed to be a trust for the benefit of

his wife and children or any of them,

According to the interest so expressed and shall not so long as any

object of trust remains be subject to the control of the husband or to

his creditors or form part of his estate. An insurance policy taken by a

married man in the above manner is ideal way to protect the interest of

his wife and children, even after his untimely death.


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Role of Life Insurance in the Growth of Economy

The Life Insurance Industry has an enviable track record among

public sector units. It has a Consistent profit and dividend paying record

accompanied by a steady growth in its financial resources. Through

investments in the Government sector and socially- oriented sectors

the Industry has contributed immensely to the nation's development.

The industry is recognized as one of the largest financial Institutions in

the country. The ventures initiated by the industry in the areas of

Mutual Fund, Housing Finance has done exceedingly well in recent

years. To protect the country's foreign exchange reserves, the

reinsurance arrangement are so organized that maximum retention is

made possible within the country while at the same time protecting

interests of the policy holders.


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Objectives

1.To get some good market exposure by dealing with the prospectsface to face.2.To improve our ability to sell a financial product like life insurance.

3.To know about the customer preference level associated withdifferent insurance brand.

4.To find out the customer satisfaction towards the variousinsurance brand.

5.Major features, which a customer looks for in an insurance policybefore making a purchase.

6.To get some information about market share of Reliance LifeInsurance as compared with other insurance brand.7.To know the market strategy of Reliance Life Insurance, which is

used to attract customer?

8.To find out the factors, which help in increasing the market shareof Reliance Life Insurance.


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Resear

ch Design


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Company Profile

Reliance Life Insurance Company Limited is a part of Reliance Capital

Ltd., a part of Reliance - Anil Dhirubhai Ambani Group. Reliance Capital

is one of India's leading private sector financial services companies,

which ranks among the top 3 private sector financial services and

banking companies. Reliance Life Insurance is not only one of India's

fastest growing life insurance companies, but also counts among the

top 4 private sector insurers. In just 2 years, the Company has crossed

the mark of 1.7 Million policies.

RLIC launched around 600 branches in 10 months, taking the overall

branch network above to 740. Reliance Life Insurance Co. is one of the

only two ISO 9001:2000 certified Life Insurance companies in India. It

has been awarded with the Jamnalal Bajaj Uchit Vyavahar Puraskar

2007- Certificate of Merit in the Financial Services category by Council

for Fair Business Practices (CFBP).

Vision & Mission

Vision

Empowering everyone to live their dreams.

Mission

Create unmatched value for everyone through dependable,

effective, transparent and profitable life insurance and pension plans.

Our Goal

Reliance Life Insurance would strive hard to achieve the 3 goals

mentioned below:


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y Emerge as transnational Life Insurer of global scale and standardy Create best value for Customers, Shareholders and all Stake

holders

Achieve impeccable reputation and credentials through best business

practices


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Company Products

Given below is the list of the policies provided by Reliance Life

Insurance Company:

Protection Plans

y Reliance Term Plany Reliance Simple Term Plany Reliance Special Term Plany Reliance Credit Guardian Plany Reliance Special Credit Guardian Plany Reliance Endowment Plany Reliance Special Endowment Plany Reliance Connect 2 Lifey Reliance Whole Life Plany Reliance Wealth + Health Plany Reliance Cash Flow Plan

Child Plans

y Reliance Super Invest Assure Plany Reliance Child Plany Reliance Secure Child Plany Reliance Wealth + Health Plan

Savings & Investment Plans

y Reliance Savings Linked Insurance Plany Reliance Super Invest Assure Plus Plany Reliance Super Invest Assure Plany Total Investment Plan I - Insurance


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y Reliance TIPS -Series I- Insurancey Reliance Wealth + Health Plany Reliance Super Automatic Investment Plany

Reliance Money Guarantee Plany Reliance Cash Flow Plany Reliance Super Market Return Plany Reliance Endowment Plan Reliance Special Endowment Plany Reliance Whole Life Plany Reliance Super Golden Years Plany Reliance Super Golden Years Plan - Valuey Reliance Super Golden Years Plan - Plusy Reliance Connect 2 Life Plany Reliance Imaan Investment Plan

Retirement Plans

y Total Investment Plan II - Pensiony Reliance Super Golden Years Plany Reliance Super Golden Years Plan - Valuey Reliance Super Golden Years Plan - Plusy Reliance Wealth + Health Plany Reliance Super Automatic Investment Plany Reliance Money Guarantee Plan

Group Plans

y Employers Liability Solutionsy Employee Protection Solutionsy Employee Voluntary Benefits


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Reliance Policies

Reliance Children Plans

What could make you happier than knowing, that your child's

future is secure? Nothing, we suppose. Which is why, Reliance Life

Insurance brings to you Reliance Secure Child Plan, a unit-linked

Insurance Plan, that gives you the freedom to enjoy today with your

child, because his tomorrow is in safe hands.

Do you see your child becoming a trailblazer? Will they create the ultimate symphony or give sports a new

dimension?

Our children may just be the ones to end the arms race and wipe

out poverty from the face of the Earth. But for them to be able to aim

for the skies, YOU NEED TO ACT NOW!

Introducing Reliance Secure Child Plan - a unique life insurancecum savings plan. secure the future of your child.

Key Features

Insurance cover on the life of child

Your child is completely protected - we will continue to pay the

premiums even if you are not alive

Life time income to child in the event of disability

Return Shield option to protect your investment returns

Liquidity in the form of partial withdrawals

Capital guarantee available on maturity and on death of the child for

basic and top-up premiums


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Option to package with Accidental Death and Total and Permanent

Disablement Rider, Critical Conditions Rider and Term Life Insurance

Benefit Rider.

Reliance Health + Wealth Policy

There are times when late working hours take precedence over

your health check-ups. And there are times when a visit to the doctor

seems more important than dividends on your shares. In the rat race to

make money, we often forget to take care of ourselves. We understand

this predicament. Here is a plan that will ensure that your wealth keeps

increasing constantly and yet your health does not take a backseat. TheReliance Wealth Health Plan. A plan that gives you the benefits of

wealth bhi. health bhi. Life changes. And as it does, so do your

priorities. After all, the circumstances of your life can determine the

type of health coverage you need. India has made rapid strides in the

health sector. Since Independence, life expectancy has gone up

markedly and survival rates have also increased, still critical health

issues remain. Infectious diseases continue to claim a large number of

lives. Reliance Wealth + Health Plan, a health insurance planunderwritten by Reliance Life Insurance Company Limited, is designed

to work in conjunction with contributions towards savings.

Key Feature

A Unit Linked plan with Unique Savings Component

Twin benefit of market linked return and health protection

Choose from two different plan options Flexibility to take care of your familys health

Flexibility to switch between funds / plan options

Option to pay Top-ups


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Reliance Pension Policy

Retirement means different things to different people, while

some want to relax and take a trip around the world, some want tostart up a venture of their own, and pursue a dream harnessed for

years. The power to make your autumn years special lies only with you.

The Reliance Super Golden Years Plan gives you the power and the right

kind of solution - A retirement plan that allows you to save

systematically and generate the much-needed corpus to make your

olden years look golden.

Key Feature

Invest systematically and secure your golden years

A flexible unit-linked pension product that is different from traditional

life insurance products with Vesting Age between 45 & 70 years

Eight different investment funds to choose from

Flexibility to switch between funds

Option to pay Regular, Single as well as Top-up premiums

Flexibility to advance / extend your Vesting Age Tax free commutation up to one third of Fund Value at Vesting Age

Reliance Whole life insurance policy

Youve always loved your family. As a loving person you want to

be rest assured that they will be happy, even if something were to

happen to you. With Reliance Whole Life Plan you can be sure that your

family will receive that timely financial support they need. Go ahead,live your today to the fullest, without a worry about tomorrow.


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SWOT Analysis

Strength

1.Reliance Life Insurance Company Limited is the part of theReliance Capital.

2.The brand name is enough to sell the products easily.3.Private placement of Rs. 10,000 crore worth of securities with RBI

by the government. Led to an improvement in market securities.

4.Strong liquidity from FII was the major reason for the up move.5.Range of products6.Reliance has a long and strong history of solvency, financial

stability.

7.Diversification of funds8.Adaptability to change

Weakness

1.Newly established company, so people seems it risky.2.Lack of staff.3.Lack of advertisement, so most of the customers are not aware of

the Reliance Life Insurance.

4.Less coverage in rural areas.Opportunity

1.There is a vast untapped market in India. The life insurancepenetration in India is approximately 2.5%. So it has largepotential.

2.Intention of traditional products is to encourage long term,regular and disciplined savings to systematically build up a target

fund.


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3.The average insurance premium being collected by the companyhas been growing exponentially year on year.

4.High growth of ULIP industry.Threat

1.The main threat is from the other players who have grabbedapproximately 15% of the market share.

2.As the government has scrapped the rebate on the life insurancepremium, the people who used to invest in life insurance for the

sole motive of tax benefit may turn to other instruments.

3.Arrival of new entrants in the insurance industry.


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Marketing Strategies of the RLIC

Some of the strategies adopted by reliance life insurance

Company

Reliance Life Insurance plans to tap Reliance Communications'

2.5-crore telephony subscriber base to market its products. The

company is considering a series of options to leverage its relationship

with Reliance Communications.

However, a joint product or a co-branded solution would require

approval from the Insurance Regulatory and Development Authority

Customers of R World, the information and entertainment portal of

Reliance Communications, would also be able to pay premiums through

a bank account, provided the bank is listed on the network.

Reliance Life Insurance officials, however, offered no comment

when asked whether there would be an arrangement for payment of

commission to Reliance Communications.

As an alternative channel for distribution, insurance companies

usually tie up with banks. In the case of banc assurance, where there is

a corporate agency tie-up, the commission could range from 5 per cent

to 40 per cent of first-year premium depending on the commission

loaded on to the product at the time of registration with IRDA.


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Research Methodology

TYPE OF RESEARCH

The research includes different options. They are:

Exploratory research:

It is usually a small-scale study undertaken to define the exact

nature of a problem and to gain a better understanding of the

environment within which the problem has occurred. It is the initial

research, before more conclusive research is under taken.

Descriptive research:It is to provide an accurate picture of some aspects of market

environment. Descriptive research is used when the objective is to

provide a systematic description that is as factual and accurate as

possible. It provides the number of time something occurs, or

frequency, lends itself to satisfied calculations such as determiningaverage number of occurrences.Casualresearch:

If the objective is too determined which variable might be causing

a certain behavior that is whether there is a cause and effect

relationship between variable, casual research must be undertaken. In

order to determine causality, it is important to hold the variable that is

assumed to cause the change in the other variable constant and thanmeasure the changes in the variable. This type of research is very

complex and the researcher can never be completely certain that there

are no other factors influencing the casual relationship, especially when

dealing with peoples attitudes and motivation.


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This research is about understanding the market stand and also

find the strength & weakness of the products of three insurance

companies by making comparing analysis of the products of the

companies, mainly descriptive research methodology are adopted.Descriptive research was adopted since it provides accurate picture

about some aspect of market environment such as which brand is

performing well and what the company can do to improve its market

share.

SAMPLING PROCEDURE

How should the respondents be chosen? To obtain a

representative sample and non-probability sample can be drawn, they

are

Judgment sample:

The researcher selects population numbers who are good

prospects for accurate information.

For collection of research data judgment-sampling technique is

used where all of them are employees of the three insurance

companies as they are good prospect for accurate information.

ACTUAL COLLECTION OF DATA

Data sources:The sources of data include either secondary data or primary data

and even some times the combination of both. The present study is

more concentration on both primary and secondary data.


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Primary data:

Primary data is collected through face-to face interaction with

customers, by meeting them in personal.

Secondary data:

The secondary data used for their study are inclusive of the

data collected from the internet, catalogues and brochures

and magazines.

METHODOLOGY

The study will conduct on the bases of survey through

questionnaires given to respondents.

Sampling Design

Sample area: Asansol

Sample Size: Population of 50

Sample unit: Employed and Businessmen customer

Sample Technique: Random Sampling

Statistical Tools: Correlation


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Comparative Analysis

Presently there are 23 Life insurance companies in the country.

There is only one public sector company LIC and the rest 22 are private

sector. Although LIC has been dominating the Life Insurance business

since past few years the private players have now started to take the

momentum.

1) Major MarketPlayers: -

Birla Sun Life Insurance Company: - Birla Sun Life Insurance

Company is a 74:26 joint venture between Birla group and Sun

Life Financial. It is a private sector company. The company was

registered on 31/1/2001. The market share for FY 2009- 10 was

8.50%.

HDFC Standard: - HDFC standard is a 74:26 joint venture

between HDFC and Standard Life. It is a private sector company.

The company was registered on 23/10/2000. The market share forFY 2009-10 was 8.00%.

ICICI Prudential Life Insurance: - ICICI Prudential Life is a 74:26

joint venture between ICICI and Prudential. It is a private sector

company. The company was registered on 24/11/2000. The

market share for FY 2009-10 was 21.60%.

Life Insurance Corporation of India (LIC): - Life InsuranceCorporation of India is a 100% government held Public Sector

Company. Being the first to be established LIC is the forerunner in

the Life Insurance sector. The market share for FY 2009-10 was

71.44%.


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Kotak Mahindra OLD Mutual: - Kotak Mahindra OLD Mutual is a

74:26 joint venture between Kotak Mahindra bank and Old

Mutual. It is a private sector company. The company was

registered on 10/1/2001. The market share for FY 2009-10 was4.00%.

Max New York Life: - Max New York Life is a 74:26 joint venture

between J & Bank, Pallonji & Co and MetLife. It is a private sector

company. The company was registered on 6/8/2001. The market

share for FY 2009-10 was 5.60%.

Aviva Life Insurance India: - Aviva Life insurance is a 74:26 jointventure between Aviva and Dabur. It is a private sector company.

The company was registered on 14/5/2002. The market share for

FY 2009-10 was 2.30%.

ING Vysya Life insurance: - ING Vysya Life Insurance is joint

venture between Exide (50%), Gujarat Cements (14.87%), Enam

(9.13%) and ING (26 %). It is a private sector company. The

company was registered on 2/8/2001. The market share for FY2009-10 is 2.00%.

Met Life India: - Met Life India is a 74:26 joint venture between

74:26 JV between J & Bank, Pallonji & Co and MetLife. It is a

private sector company. The company was registered on

6/8/2001. The market share for FY 2009-10 was 3.30%.

Bajaj Allianz Life Insurance Co.: - Bajaj Allianz Life InsuranceCompany is a 74: 26 Joint venture between Bajaj Auto limited and

Allianz AIG. The company was registered on 3/8/2001. The market

share for FY 2009-10 was 13.20%.


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SBI Life Insurance Company Ltd: - SBI Life Insurance Company is a

74: 26 Joint venture between SBI and Cardiff S.A. The company

was registered on 31/3/2001.It is a private sector company. The

market share for FY 2009-10 was 14.80%.

The TATAAIG Group: - TATA AIG group is a 74:26 JV between

Tata Group and AIG. It belongs to the private sector. The company

was registered on 12/2/2001. The market share for FY 2009-10

was 3.30%.

Reliance Life Insurance Company Ltd.: - First Wholly Indian

Owned Private Life Insurance Company. The Companycommenced operations from 1st February 2006. The market

share for FY 2009-10 was 9.90 %.


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2) Market share of private players

ICICI Prudential 21.60%

SBI Life 14.80%

Reliance Life 13.20%Bajaj Allianz 9.90%

Birla Sunlife 8.50%

HDFC Standard 8.00%

Max New York Life 5.60%

Kotak Mahindra OM 4.00%

Others 3.50%

Tata AIG 3.30%

Metlife 3.30%

Aviva Life 2.30%

ING Vyasa 2.00%

ICICI

Prudential, 21.60%

SBI Life, 14.80%

Reliance Life, 13.20%Bajaj Allianz, 9.90%

Birla Sunlife, 8.50%

HDFC

Standard, 8.00%

Max New

YorkLife, 5.60%

Kotak Mahindra

OM, 4.00%

Others, 3.50%

Tata AIG, 3.30%

Metlife, 3.30% Aviva Life, 2.30%

ING Vyasa, 2.00%

YTD FY2009 MARKET SHARE - PRIVATE PLAYERS


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3)Business Figure of first year premium of life insurers for the period ended april 2010

First Year Premium of Life Insurers for the Period ended April, 2010 (Rs Crore)

SlNo.

Insurer Premium No. of Policies / Schemes

No. of lives covered under

Group Schemes

April, 10Upto April,

09April, 10

Upto April,

09April, 10

Upto April,

09

1 Bajaj Allianz

Individual Single Premium 26.65 4.83 5341 2820

Individual Non-Single Premium 117.90 87.42 106379 76108

Group Single Premium 4.80 1.08 1 1 6001 183

Group Non-Single Premium 14.68 69.87 106 34 1646877 141645

2 ING Vysya





3 Reliance Life





4 SBI Life





5 Tata AIG





6 HDFC Standard





7 ICICI Prudential





8 Birla Sunlife




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9 Aviva





10 Kotak Mahindra Old Mutual





11 Max New York





12 Met Life





13 Sahara Life





14 Shriram Life





15 Bharti Axa Life





16 Future Generali Life





17 IDBI Fortis Life




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18 Canara HSBC OBC Life





19 Aegon Religare





20 DLF Pramerica





21 Star Union Dai-ichi @





22 IndiaFirst #

Individual Single Premium 6.49 655

Individual Non-Single Premium 28.98 8957

Group Single Premium 0.00 0 0

Group Non-Single Premium 0.00 0 0

Private Total





23 LIC





Grand Total






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Riders Accident Benefit,

Accidental Total &

Permanenet Disability

Benefit (Rs. 50,000

Fix)

Major Surgical Benefit,

Critical

Conditions, Term Life

Insurance

Benefit, Accidental

Death and Total

and Permanent

Disablement

ADB, CI ADB, Accidental

Permanent Total/

Partial

Disability Benefit, CI

Benefit, Hospital Cash

Benefit, Waiver of

Premium Benefit,

Family

Income Benefit

Top-Ups 25% of premium paid

till date

Allowed Min Rs 10,000 Min Rs 5,000

Fund Management

Charges

Rs. 0.75% p.a. of fund

value

Money Market, Gilt,

Corporate Bond

1.25% p.a.

Equity, Infrastructure,

Energy,

Midcap, Pure Equity

Fund 1.5% p.a.

Liquid Fund, Stable

Managed Fund,

Secure Managed

Fund, Defensive

Managed Fund,

Balanced Managed

Fund, Equity Managed

Fund, Growth

Fund 1.25% p.a.

Equity Growth Fund

and Accelerator

Mid-Cap Fund

1.75% p.a.; Equity

Index

Fund II and Asset

Allocation Fund -

1.25%

p.a.; Bond Fund and

Liquid Fund - 0.95%p.a.

Policy

Administration

Charges

Rs. 25 p.m. Rs. 50 per month Rs 60 per month Rs. 50 per month

Charges on Top-Ups 2% of top-ups 2% of top-ups Paid during Yr 1: 2.5%

of top-ups; Paid

during Yr 2: 2% of top-

ups

2% of top-ups

Premium Allocation

Charges

PY AC

1 75%

2+ 5%

PY AC

1 80%

2+ 6 %

Yr 1

Premium range

AC

12000- 199,999

60%

200,000-499,99948%

500,000-999,999

36%

1,000,000-1,999,999

23%

2,000,000+

10%

Yr 2 - 7%

Yr 3+ - 2%

PY AC

1 yr 55%

2-5yrs 4%

6-13yrs 2%


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Findings and Interpretations

We have presented below the findings and analysis of the questionnaire

addressed to the respondents to gauge the attitude and perception of the peopletowards insurance.

Data gives preference ofrespondents of insurance companies

COMPANYS NAME NO.OF RESPONDENT SHARE (%)

L.I.C. 38 76

BAJAJ ALLIANZ 1 2

RELIANCE LIFE INSURANCE 3 6

TATA AIG 0 0ICICI PRUDENTIAL 4 8

BIRLA SUN LIFE 0 0

SBI LIFE 3 6

HDFC 1 2

TOTAL 50 100

Interpretation

76% of respondents contacted prefer LIC Policy to any other and there for

it is ranked no. 1 by that percent of respondents.

76%

2%

6% 0% 8%

0%

6%

2%

Preference of respondents

L.I.C.

BAJAJ ALLIANZ

RELIANCE LIFE

INSURANCE

TATA AIG

ICICI PRUDENTIAL


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Data gives respondents attract towards features of insurance

policies

Policy Features NO.OF RESPONDENT SHARE (%)

Low premium 7 14Larger risk coverage 19 38

Money back guarantee 10 20

Reputation of company 9 18

Easy access to advisor 4 8

Any other 1 2

Total 50 100

Interpretation

38% people believe that larger risk coverage is the biggest feature of any

life insurance policies.

Where as 20% respondents believe in money back guarantee and 18% and14% respondents care about reputation of companies and low premium

respectively.

14%

38%20%

18%

8%

2%

Chart Title

Low premium

Larger risk coverage

Money back guarantee

Reputation of company

Easy access to advisor

Any other


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Data gives benefits of insurance perceived by respondents

BENEFITS NO.OF RESPONDENTS SHARE (%)

Cover Future Uncertainty 27 54

Tax Deductions 10 20

Future Investment 13 26

TOTAL 50 100

Interpretation

55% of the respondents believe that covering future uncertainty is thebiggest benefit of an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Taxdeduction and future investments respectively.

Cover Future Uncertainty

Tax Deductions

Future Investment


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Data gives for how long policy has been taken by respondents

Duration No of respondents Share(%)

Less than 5 year 10 20

5 10 years 5 10

10 15 years 15 30

Above 15 years 20 40

Total 50 100

Interpretation

40% people have policies for more than 15 years.

Where as 20% respondents have policy for less than 5 years.

Which shows that maximum people prefer for long term investments.

Less than 5 year

5 10 years

10 15 years

Above 15 years


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Data gives the respondents buying behaviour

Reasons to buy No of respondents Share(%)

Customer approach 10 20Excellent plan 20 40

Brand image 5 10

Excellent services 12 24

Reliable 3 6

Total 50 100

Interpretation

40% respondents go for the excellent plan where as 24% respondents

believe in excellent services.

Where as 20 % people love customer approach and, 10% and 6%

respondents care about image and reliability of brands respectively.

Customer approach

Excellent plan

Brand image

Excellent services

Reliable


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5

Data gives motive behind investing in life insurance

Motives No of respondents Share(%)

TAX 20 40SAVING 5 10

RISK COVERAGE 23 46

RETURN/YIELD 2 4

TOTAL 50 100

Interpretation

Here we can see that majority of the people tend to invest in life insurance

for the risk coverage. The next preferred option is Tax Saving. We founded from

the discussion with public and some experts that those people with a low income

tend to invest in life insurance to gain tax benefit. Saving motive constitutes very

small part of the total sample. Return comes last. But this is the generalconclusion of 50 people. If we take a larger sample, we can get a different result.

As the private players have launched ULIPs, more and more people are

turning towards these products so the Investment motive has been gaining

command. Also the number of those people who wish to invest for return is also

increasing.

40%

10%

46%

4%

Chart Title

TAX

SAVING

RISK COVERAGE

RETURN/YIELD


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According to a life insurance expert (Vinod Thakkar ), life insurance is for

protection first then for Savings and Tax benefits all those things.

Data gives influencing sources ofrespondents decision in policy

buying

Source No of respondents Share(%)

On my own 29 58

Family decision 7 14

Employer decides 0 0

Agents guidance 14 28

TOTAL 50 100

Interpretaion

Here we can see that majority people (58%) decides on their aboutinvesting in life insurance. 28% persons decides as per the guidance of the agent.

There is no contribution of employers in the decision of ones investment in

life insurance. 14% people invest in life insurance as per the family decision.

58%14%

0%

28%

Chart Title

On my own

Family decision

Employer decides

Agents guidance


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Data gives respondents preference for life insurance policy type

Type of policy No of respondents Share(%)

Term Assurance 9 18

Whole Life 9 18

Endowment 7 14

Combined 19 38

Ulips 6 12

TOTAL 50 100

Interpretation

As it is evident from the chart and the table 38% people prefer combination

of Whole Life and Endowment product. It gives people double advantage. The

person would get some amount at the end of the stipulated period; for instance

20 years, and after that period the risk cover continues and the rest of theamount would be paid when the person dies.

18%

18%

14%

38%

12%

Policy type preferences

Term Assurance

Whole Life

Endowment

Combined

Ulips


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Data gives respondents perception to invest in Rlic

Rate of RLIC in policy

No of

respondents Share(%)

Good 31 62

Very Good 10 20

Average 6 12

Bad 0 0

Can't say 3 6

TOTAL 50 100

Interpretation

As evident from the chart there are 62% of respondents are feel good to

invest in RLIC.

Where as 20% people assume that Reliance Life Insurance si very good

company.

62%

20%

12%

0%6%

Rate of RLIC in policy

Good

Very Good

Average

Bad

Can't say


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Data Gives respondents perception about the quality of RLIC

Rate of RLIC in quality No of respondents Share(%)

Good 15 30

Very Good 8 16

Average 23 46

Bad 1 2

Can't say 3 6

TOTAL 50 100

Interpretation

As we can see in pie chart that 46% of respondents remarked average to

quality of rlic where as 30% good and 16% very good.

Good

30%

Very Good

16%

Average

46%

Bad

2%

Can't say

6%Rate in quality


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Data gives respondents satisfaction level by Rlic

Satisfaction Level No of respondents Share(%)

Very satisfied 27 54

Satisfied 17 34

Unsatisfied 2 4

Poor 1 2

Can't say 3 6

TOTAL 50 100

Interpretation

54% respondents are very satisfied with reliance life insurance

34% are satisfied and 4% and 2% people are not happy with RLIC.

54%34%

4%2%

6%

Satisfaction level of respondents

Very satisfied Satisfied Unsatisfied Poor Can't say


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Results

After the survey it was found that still major portion of customers

go for public insurance companies, but with the entry of more and

more private companies the scenario is changing rapidly, people with a

need of more and better returns are opting for private companies, and

this can be justified by the increasing market share of private

companies in the Indian insurance sector.

There are various ways in which private companies are found

much more lucrative than public companies and the facts which

support this statement are as follows:-

1. Versatility of products.

2. Efficient fund managers.

3. Better customer services.

4. More returns.

5. Regular follow up.

6. Quicker settlement


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Conclusion

After the deep study of insurance sector of India, I can tell that

this is the sector, which has most business opportunities perhaps

in India.

Insurance industry is one of the fastest sectors in India. Insurance

sector has been growing by 34% to 36% and it is expected to

increase by 50% in coming 5 years. After the opening up of the

insurance sector, it has become much competitive and insurance

awareness among people has increased.

As far as the comparison of Reliance Life Insurance and other

players is concerned, there are both positive as well as negative

impacts on both the sides.

For Reliance Life Insurance, the negative aspect is that its market

share is low.

For private players the negative aspect is that they have to fight

with the public sector giant which is established player with a high

brand value.

But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has

increased.

The insurance sector is likely to attain a size of Rs. 2,00,000 crore

($ 51.2 billion) in 2009-10. In life insurance, the business grew by 23.3%

to Rs. 93,000 crore in 2007-08 (Source:Assocham). The sector alone

employs close to 30 lakh people (including agents and direct

employees).The challenge is to spread awareness about life insuranceand it true benefits. The industry has to convince people to park their

hardly earned money in long-term insurance and not just look at it as a

tax saving instrument.


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Limitations

I am a human hang, so there is some limitation of the human

hangs which is reflected in this research.

The following are the limitation of this research study.

1.The sample size of 50 might not represent the perception ofwhole population, as the sample size is too small for total

population of Asansol city.

2.The opinion expressed by the respondents may be biased.3.The attitude of the research might be biased.4.One of the most influencing and most critical limitations is

that I am not trained for the research study and this is my

first study. I tried hard to come at conclusion, but there is

lack of expertise.

5.Another limitation is that there is lack of time. If I give moretime then studies will be more effective.

There are some limitations of this study. But in spite of theirlimitation I worked with the enthusiasm. And I tried to give the best

results to the research of this report.


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Bibliography/References

http:\\www.reliancelife.com

http:\\www.irdaindia.com

http:\\www.lic.co.in

http:\\www.wikipedia.com

http:\\www.google.com

Outlook Money Magazine

Life Time Magazine of Reliance Life Insurance

Broachers of Reliance Life Insurance


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Annexure Questionnaire

Section A: Personal Information

1) If your occupation is following, then proceedServiceBusiness

2) Name: -3) Address: -4) Gender: - Male Female5) How much old you are? (in between)

18 to 29 30 to 40 41 to 54 55 and above

6) Income level (per month)Less than 15,000

15,001 25,000

25001 35,000

35,000 & above

7) Educational BackgroundHigh school

Intermediate

Graduate

Post Graduate

Other specify

Section B: About Insurance Brand

8) Which insurance brand you preference?a) RLI b) ICICI Prudential c) HDFC Standardd) LIC e) Bajaj Allianz f) SBI Life

g) Birla SunLife h) Tata AIG i) Others specify

9) Please write the policy plan of your brand10) Which feature of your policy attracted you to buy it?

a) Low premiumb) Larger risk coveragec) Money back guaranteed) Reputation of companye) Easy access to advisorf) Any other _______________________

11) For how many years do you have insurance policy?Less than 5 year

5 10 years

10 15 years

Above 15 years


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12) What are the reasons for availing above mentioned insurance brand?(Rank them)a) Customer approach

b) Excellent planc) Brand imaged)

Excellent services

e) Reliable13) What is main motive behind investing in life insurance?(Rank them)

a) Tax benefitb) Savingsc) Risk coverd) Return/Yield

14) How do you decide about investing in life insurance?On my own

Family decision

Employer decisionAs per the guidance of advisor

15) Which life insurance policy would you prefer to buy?a) Term assurance

b) Whole lifec) Endowmentd) Combination of Endowment and whole lifee) Unit Linkedf) Traditional

16) How do you rate Reliance Life Insurance by our other company insurance policy?Good Very good Average Bad

Cant say

17) How do you rate the quality of service provided by Reliance Life Insurance than others?Good Very good Average Bad

Cant say

18) What is your satisfaction level provided by Reliance Life Insurance as compared with others?Very satisfied Satisfied Unsatisfied Poor

Project Report on RLI

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