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Preface--------------------------------------------------- (3)

Certificate------------------------------------------------ (4)

Acknowledgement-------------------------------------- (5)

Executive Summary------------------------------------- (6)

Index----------------------------------------------------- (7)

Projects, Thesis, Dissertation – 2


Anil Dhirubhai Ambani Group (ADAG) announces the acquisition of 100

percent shareholding in AMP Sanmar Life Insurance Company Limited.
Reliance Life Insurance Company Limited is officially launched on
February 1, 2006. This was after obtaining the required regulatiry approvals
from the Registrar of Companies and the Insurance Regulatory and
Development Authority. Reliance Life Insurance is the part of the Reliance

Reliance Life Insurance has plenty of plans on the anvil. It has also 118
branches, with strong presence in South and a bouquet of products catering
savings protection and investment need of individuals and corporate. The
head-office of it is at Chennai.

The company has already added 600 employees in addition to the 1000 plus
staff of the erstwhile AMP Sanmar Life Insurance Company Limited.
Reliance Life Insurance aims to be the consumer’s preferred life insurer by
understanding and meeting his needs.

Think Bigger, Think Better!


Projects, Thesis, Dissertation – 3

1.1 Meaning of Insurance 10
1.2 Importance of Insurance 11
1.3 Difference between Insurance and Assurance 12
1.4 Principles of Insurance 13
1.5 History of Insurance 15
1.6 Time line in Insurance history 17
1.7 Meaning of Life Insurance 19
1.8 History of Life Insurance 20
1.9 Key features of Life Insurance 24
1.10 Benefits of Life Insurance 27
1.11 Role of Life Insurance in the growth of economy 28
2.1 About Reliance Life Insurance 30
2.2 History 32
2.3 Journey so far 32
2.4 Role of IT at Reliance Life Insurance 33
2.5 Mission 36
2.6 Core Values 36
2.7 Future Plans 37
2.8 Head – Office 37
2.9 Branches 38
3.1 Traditional Plans 40
3.2 Unit linked Plans 48
4.1 Recruitment 53
4.2 Selection 53
4.3 Training and Development 56
4.4 Career Development 56
4.5 Communication 57
4.6 Incentives 59
4.7 Services 59
4.8 Performance Appraisal 60
4.9 Organizational form and Structure 61
4.10 Department 61

Projects, Thesis, Dissertation – 4

5.1 Distribution Channel 63
5.2 Promotional Programmes and Target segment 66
5.3 Comparative Study 71
6.1 Objective of the study 79
6.2 Questionnaire 79
6.3 Sampling Method and Sampling Size 80
6.4 Limitations 82
6.5 Analysis of Questionnaire 83
6.6 SWOT Analysis 96

Projects, Thesis, Dissertation – 5




Projects, Thesis, Dissertation – 6

Insurance may be described as a social device to reduce or eliminate risk of
loss to life and property. Insurance is a collective bearing of risk. Insurance
is a financial device to spread the risks and losses of few people among a
large number of people, as people prefer small fixed liability instead of big
uncertain and changing liability.

Insurance can be defined as a “legal contract between two parties whereby

one party called insurer undertakes to pay a fixed amount of money on the
happening of a particular event, which may be certain or uncertain.” The
other party called insured pays in exchange a fixed sum known as premium.

Insurance is desired to safeguard oneself and one’s family against possible

losses on account of risks and perils. It provides financial compensation for
the losses suffered due to the happening of any unforeseen events.


Projects, Thesis, Dissertation – 7

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, it has 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. So it offers lot of scope for studying the insurance

Right now the insurance industry has great opportunities in a country like
India or China which huge population. Also the penetration of insurance in

Projects, Thesis, Dissertation – 8

India is very low in both life and non-life segment so there is lot potential to
be tapped.
Before starting the discussion on insurance industry and related issues, we
have to start with the basics of insurance. So first we understand what is
insurance? How the word ‘insurance’ is different from the word
‘assurance’? etc.



Assurance is older in history and it was used to describe all types of

insurances. From 1826, the term assurance came to be used only for the risks
covered by life insurance and the term insurance was exclusively used to
denote the risks covered by marine, fire, etc.

The word assurance indicated certainty. In life insurance, there is an

assurance from the insurance company to make payment under the policy
either on the maturity or at earlier death. On the other hand the word
insurance was used to denote indemnity type of insurances where the
insurance company was liable to pay only in case of the loss damage the

The insured event was bound to happen sooner or later under assurance but
the event insured against may or may not happen under insurance.

Projects, Thesis, Dissertation – 9

The principle of “indemnity” applies to “insurance contracts”(non-life) only.
The scope of the word, insurance is wider.


An insurance contract is based on some basic principles of insurance.

(1) Principle of “Uberrima Fides” or Principle of utmost good


It means “maximum truth”. Both the parties should disclose all

material information regarding the subject matter of insurance.

(2) Principle of indemnity

This means that if the insured suffers a loss against which the policy has
been made, he shall be fully indemnified only to the extent of loss. In
other words, the insured is not entitled to make a profit on his loss.

(3) Principle of subrogation

This means the insurer has the right to stand in the place of the insured
after settlement of claims in so far as the insured’s right of recovery from
an alternative source is involved. The insurer before the settlement of the
claim may exercise the right. In other words, the insurer is entitled to
recover from a negligent third party any loss payments made to the

Projects, Thesis, Dissertation – 10

insured. The purposes of subrogation are to hold the negligent person
responsible for the loss and prevent the insured from collecting twice for
the same loss. The concept of ‘Third Party Claims’ is based on the same

(4) Principle of causa proxima

The cause of loss must be direct and an insured one in order to claim of

(5) Principle of insurable interest

The assured must have insurance interest in the life or property insured.
Insurable interest is that interest which considerably alters the position of
the assured in the event of loss taking place and if the event does not take
placed, he remains in the same old position.


Projects, Thesis, Dissertation – 11

The concept of insurance is believed to have emerged almost 4500 years ago
in the ancient land of Babylonia where traders used to bear risk of the
carvan by giving loans, which were later repaid with interest when the goods
arrived safely.

The concept of insurance as we know today took shape in 1688 at a place

called Lloyd’s Coffee House in London where risk bearers used to meet to
transact business. This coffee house became so popular that Lloyd’s became
the one of the first modern insurance companies by the end of the eighteenth

Marine insurance companies came into existence by the end of the

eighteenth century. These companies were empowered to write fire and life
insurance as well as marine. The Great Fire of London in 1966 caused huge
loss of property and life. With a view to providing fire insurance facilities,
Dr. Nicholas Barbon set up in 1967 the first fire insurance company known
as the Fire office.

The early history of insurance in India can be traced back to the Vedas. The
Sanskrit term ‘Yogakshema’ (meaning well being), the name of Life
Insurance Corporation of India’s corporate headquarters, is found in the Rig
Veda. The Aryans practiced some form of ‘community insurance’ around
1000 BC.

Life insurance in its modern form came to India from England in 1818. The
Oriental Life Insurance Company was the first insurance company to be set
up in India to help the widows of European community. The insurance

Projects, Thesis, Dissertation – 12

companies, which came into existence between 1818 and 1869, treated
Indian lives as subnormal and charged an extra premium of 15 to 20 per
cent. The first Indian insurance company, the Bombay Mutual Life
Assurance Society, came into existence in 1870 to cover Indian lives at
normal rates.

The Insurance Act, 1938, the first comprehensive legislation governing both
life and non-life branches of insurance were enacted to provide strict state
control over insurance business. This amended insurance Act looked into
investments, expenditure and management of these companies.

By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and
75 provident societies carrying on life insurance business in India. Insurance
business flourished and so did scams, irregularities and dubious investment
practices by scores of companies. As a result the government decided to
nationalize the life assurance business in India. The Life Insurance
Corporation of India (LIC) was set up in 1956. The nationalization of life
insurance was followed by general insurance in 1972.



¾ 1818 British introduced the life insurance to India with the

Projects, Thesis, Dissertation – 13

establishment of the Oriental Life Insurance Company
. in Calcutta.

¾ 1850 Non life insurance started with Triton Insurance


¾ 1870 Bombay Mutual Life Assurance Society is the first India

owned life insurer.

¾ 1912 The Indian Life Assurance Company Act enacted to

regulate the life insurance business.

¾ 1938 The Insurance Act was enacted.

¾ 1956 Nationalization took place. Government took over 245

Indian and foreign insurers and provident societies.

¾ 1972 Non-life business nationalized, General Insurance

Corporation (GIC) came into being.

¾ 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R. N. Malhotra to
draw a blue print for insurance sector reforms.

¾ 1994 Malhotra committee recommended reentry of private


Projects, Thesis, Dissertation – 14

¾ 1997 IRDA (Insurance Regulatory and Development
Authority) was set up as a regulator of the insurance
market in India.

¾ 2000 IRDA started giving license to private insurers. ICICI

Prudential, HDFC were first private players to sell
insurance Policies.

¾ 2001 Royal Sundaram was the first non-life private player to

sell an insurance policy.

¾ 2002 Bank allowed to sell insurance plans as TPAs enter the

scene, insurers start setting non-life claims in the
cashless mode.


There are three parties in a life insurance transaction: the insurer, the
insured, and the owner of the policy (policyholder), although the owner and

Projects, Thesis, Dissertation – 15

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.

• Term life insurance provides for life insurance coverage for a

specified term of years for a specified premium. The policy does not
accumulate cash value.

• Permanent life insurance is life insurance that remains in force until

the policy matures, unless the owner fails to pay the premium when

• Whole life insurance provides for a level premium, and a cash value
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.

• Universal life insurance (UL) is a relatively new insurance product

intended 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.

If you want insurance protection only, and not a savings and investment
product, buy a term life insurance policy.

Projects, Thesis, Dissertation – 16

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 ( or your local library for
information on the financial soundness of insurance companies.


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 contained three 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.

Projects, Thesis, Dissertation – 17

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 it did 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.

During the feudal period, early forms of insurance ebbed with the decline
of travel and long-distance trade. But 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

And similar to ancient Rome, burial societies were formed in the Buddhist
period to help families build houses, and to protect widows and children.

¾ 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 it's roots to 17th century
England. Lloyd's of London, or as they were known then, Lloyd's Coffee

Projects, Thesis, Dissertation – 18

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 were placed at Lloyd’s on
their anticipated dates of death. Reacting against such practices, 79 merchant
underwriters broke away in 1769 and two years later formed a “New Lloyd’s
Coffee House” that became known as the “real Lloyd’s.” Making wagers on
people's deaths ceased in 1774 when parliament forbade the practice.

¾ 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 insurance really 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

Projects, Thesis, Dissertation – 19

great Chicago fire of 1871 further emphasized how fires can cause huge
losses in densely populated modern 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 of

industrialization. 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.

During the 19th century, many societies were founded to insure the life and
health of their members, while fraternal orders provided low-cost, members-
only insurance. Even today, such fraternal orders continue to provide
insurance coverage to members, as do most labor organizations. Many
employers sponsor group insurance policies for their employees, providing
not just life insurance, but sickness and accident benefits and old-age
pensions. Employees contribute a certain percentage of the premium for
these policies.

¾ Final Thoughts

Even though the American insurance industry was greatly influenced by

Britain, the US market developed somewhat differently from that of the
United Kingdom. Contributing to that was America's size; land diversity
and the overwhelming desire to be independent. As America moved from a
colonial outpost to an independent force, from a farming country to an

Projects, Thesis, Dissertation – 20

industrial nation, the insurance business developed from a small number of
companies to a large industry.

Insurance became more sophisticated, offering new types of coverage and

diversified services for an increasingly complex country.


1) 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.

2) 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.

3) 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.

4) Cash Value: -

Projects, Thesis, Dissertation – 21

The cash value of a permanent life insurance policy is accumulated
throughout the life of the policy. It equals the amount a policy owner would
receive, after any applicable surrender charges, if the policy were
surrendered before the insured's death.

5) Dividends: -

Many life insurance companies issue life insurance policies that entitle the
policy owner to share in the company's divisible surplus.

6) Paid-Up Additions: -

Dividends paid to a policy owner of a participating policy can be used in

numerous ways, one of which is toward the purchase of additional coverage,
called paid-up additions.

7) Policy Loans: -

Some life insurance policies allow a policy owner to 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.

8) 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 is available that
will allow her to convert her policy to a permanent one without providing
additional proof of insurability.

9) Disability Waiver of Premium

Projects, Thesis, Dissertation – 22

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


1) Risk cover: -

Life Insurance contracts allow an individual to have a risk cover against any
unfortunate event of the future.

2) Tax Deduction: -

Under section 80C of the Income Tax Act of 1961 one can get tax deduction
on premiums up to one lakh rupees. Life Insurance policies thus decrease the
total taxable income of an individual.

Projects, Thesis, Dissertation – 23

3) Loans: -

An individual can easily access loans from different financial institutions by

pledging his insurance policies.

4) Retirement Planning: -

What had provided protection against the financial consequences of

premature death may now be used to help them enjoy their retirement years.
Moreover the cash value can be used as an additional income in the old age.

5) Educational Needs: -

Similar to retirement planning the cash values that flow from ones life
insurance schemes can be utilized for educational needs of the insurer or his



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,

Projects, Thesis, Dissertation – 24

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.



Projects, Thesis, Dissertation – 25


Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd.

of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of
India’s leading private sector financial services companies, and ranks among
the top 3 private sector financial services and banking companies, in terms

Projects, Thesis, Dissertation – 26

of net worth. Reliance Capital has interests in asset management and mutual
funds, stock broking, life and general insurance, proprietary investments,
private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company

(NBFC) registered with the Reserve Bank of India under section 45-IA of
the Reserve Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial

services sector in India and aims to become a dominant player in this
industry and offer fully integrated financial services.

Reliance Life Insurance is another steps forward for Reliance Capital

Limited to offer need based Life Insurance solutions to individuals and


Reliance Capital Limited announced the launch of its life insurance business
on February 1, 2006. This was after obtaining the required regulatory
approvals from the Registrar Of Companies and the Insurance Regulatory
and Development Authority.

It was in August 2005 that the ball was set rolling when Reliance Capital
Limited, the financial arm of Reliance – Anil Dhirubhai Ambani Group

Projects, Thesis, Dissertation – 27

(ADAG) – announced the requisition of 100% shareholding in AMP Sanmar
Life Insurance Company Limited; and the formal transfer of shares took
place in October 2005. The company will issue all policy contracts under the
Reliance Life Insurance Company limited name. All the existing policy
contracts also stand transferred to the Reliance Life Insurance entity with all
the original contractual terms and commitments intact.


™ 2005

August: Anil Dhirubhai Ambani Group (ADAG) announces the

acquisition of 100 percent shareholding in AMP Sanmar Life Insurance
Co Ltd.

™ 2006

January 17: Mr. Nandgopal participates in a one-day conference on

‘Optimising growth opportunities through Distribution Matrix:

Projects, Thesis, Dissertation – 28

‘Emerging Bancassurance’ organized by the Asia Insurance Post at the
Taj President, Mumbai.

February 1: Rliance Life Insurance officially launched.

February 16, 17, 18: Strategy meet at the Reliance Management

Institute. Amongst those who participate are the CEO, COO, Functional
Heads, Regional Managers and Regional Sales Managers.

February 26: A Puja held at the Churchgate office situated in Express

Building, 4th Floor, 14 ‘E’ Road, Mumbai.

March 1: Churchgate office inaugurated by Mr. Amitabh

Jhunjhunwala, Mr. Amitabh Chaturvedi and Mr. Nandgopal.

March 6: Shifting to the new premises at Churchgate commences.

March 7: The new office at Chennai, at the Trapezium, First Floor, #

39, Nelson Manickam Road, inaugurated by their CEO Mr. Nandgopal,
Mr. KV Srinivasan and Mr. Sureshbabu also graced the occasion.



1) World Class Data Centre: -

They plan to establish a Primary Data Centre at Navi Mumbai

(Dhirubhai Ambani Knowledge City) which will cater to their company
needs across India, with fail-over capability to their Chennai Data Centre

Projects, Thesis, Dissertation – 29

within the same business day in occurance if an incident or Disaster

2) Inter Office Connectivity: -

All their Branch / Area and Regional offices will be

interconnected to their Data Centre with a 24x7 access to Core
Applications like Lotus Mail, Life-Asia and Internet Applications. This
will enable their associates to work faster and better with high-speed
Internet connectivity and also ensure faster Turn Around Time for their

3) Customer Care Centre: -

They will host a centralized Customer Care Centre at

Dhirubhai Ambani Knowledge City at Navi Mumbai, which cater
services to internal and external queries and complications. A customer
Relationship Management Tool (CRM) and Lead Management System
(LMS) are in progress.

4) Web Portal: -

This portal will be an interface between both internal employees

and their external users. Some of the functions included in their portal are
Policy Tracking Systems, Corporate News, Quality Checking System,
Under Writing Medical System, and Agent Management System etc.

5) R World: -

Projects, Thesis, Dissertation – 30

Reliance Mobile R-World will provide online information about
their Company, Products, and Policy Services to their existing customers,
Agents/Advisors and Lead Generators.

6) SMS Alerts: -

SMS Alerts will be provided to their Sales Managers about the

latest happenings like Contests and Campaigns, Employee Alerts will
include Company News and Welcome/Birthday/Anniversary message
etc. Customer Alerts will include Welcome/Birthday/Anniversary
message, Policy Dispatch Details, Policy Servicing SMS like Premium
Receipt and Renewal Premium reminders etc.

7) Life and Group Asia: -

Single Life and Group Life details will be captured and managed
by Life and Group Asia. A common middleware between these
applications will enable Group Life Customers to view their individual
Single Life Insurance Plan details taken with Reliance Life Insurance and
vice versa.

8) Advisor Lounge: -

It is a dedicated area for Reliance Life Insurance

Agents/Advisors in all the branches across India. This Lounge will be
equipped with desktops and printers with Internet connectivity, where
their Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes. The Agents/Advisors can
use this area to service their existing customers.

9) Document Management System: -

Projects, Thesis, Dissertation – 31

DMS will enable both policy issuance and contract servicing
through an automated workflow, which yields a faster Turn around Time
to both internal and external users. This application will enable them to
have a paperless office and thus mitigate the risk of losing vital

10) Wireless Data Access: -

This will enable identified Top Sales Managers and Top Advisors
to access real time data for both LMS and CRM on the fly through Handheld
PDA device.

11) SAP – ERP Modules: -

SAP (Finance and HR Modules), will automate the Expense,

Travel and Leave Management Systems.


The mission of Reliance Life Insurance Company Limited is to be the best in

every sphere- business results, customer care and employee focus. The aim
of the company is to Think Bigger and Think Better.


Reliance Life Insurance Company Limited has some core values which are
listed as follows:

Projects, Thesis, Dissertation – 32

1) Result Oriented
2) Performance Driven
3) Customer Focused
4) Learning and Development Oriented
5) Employee Centric
6) Informal and Fun


¾ Forty-four new branches to be opened across the country in the

coming months; and a pan India presence with 162 branches in the
coming year.

¾ A state-of-the-art customer care centre will provide continuous,

responsive services to the caller and promptly address queries, collate
feedback and suggestions from the caller, who may be both
prospective and existing clientele and from channel partners in
Chennai and Mumbai.

¾ It will be launching additional products aimed at providing

unparalleled service to its valued clientele.


Projects, Thesis, Dissertation – 33

Reliance Life Insurance Company Limited,
The Trapezium,
39, First Floor,
Nelson Manickam Road,
Chennai – 600 029.


They have so many branches and substations in the India. They have around
160 branches in the India. And they have planned to open more branches
across the country in the coming months.

Projects, Thesis, Dissertation – 34


Projects, Thesis, Dissertation – 35


Life insurance products are designed to suit the requirements

of customers. Fundamentally the product provide for:

ƒ Risk cover
ƒ Investment
ƒ Health cover

Projects, Thesis, Dissertation – 36

In every product, to a certain degree, risk cover is imperative
for it to fall under the category of insurance. Based on the coverage of the
product, the premiums are calculated and the customer pays accordingly. In
order to suggest the right product, it is essential for an agent to understand
the requirements of the customer well.

Reliance Life Insurance Company Limited has offered 9

traditional plans to the customers, which are listed as follows:

1) Reliance Term Plan

2) Reliance Whole Life Plan
3) Reliance Child Plan
4) Reliance Endowment Plan
5) Reliance Special Endowment Plan
6) Reliance Cash Flow Plan
7) Reliance Credit Guardian Plan
8) Reliance Special Credit Guardian Plan

Each of the above traditional plans is discussed as follows:

1) Reliance Term plan: -

This insurance policy is designed for those who only want life cover for the
protection of their family, and do not wish to save for themselves. It can also
be useful to business firms that wish to provide financial security to their
business against the sudden loss of partners or valuable manpower. Since

Projects, Thesis, Dissertation – 37

there is no saving element or bonus provision, the premium is very low.
Hence, this is a high-risk plan with a low premium.

™ Features: -

a) Purely a term plan

b) Entry age minimum 18 years and maximum 65 year

c) Maximum premium paying term is 30 year

d) Loan facility N.A.

e) Maturity amount = Sum assured

2) Reliance Whole Life Plan: -

This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect their
family by availing of insurance cover on their life at a very low cost.

™ Features: -

a) It is a whole life insurance policy with profits

b) Low cost life cover
c) Maturity age is 85 year or 99 years last birthday as chosen
d) Maturity amount = Sum assured + Vested bonus
e) Tax benefit is available

Projects, Thesis, Dissertation – 38

3) Reliance Child Plan: -

This insurance policy is designed for people who wish to save money for a
future time when there will be a recurring need for substantial amounts of
money. This is especially true when it comes to paying large sums of money
for higher education as and when your son or daughter is studying to become
an Engineer, a Doctor or specialize in some other field, or is perhaps
planning to go abroad.

This money is payable in equal installments over the last 4 years of the
policy term.

™ Features: -

I. Minimum entry age is 20 year and maximum 60 year

a) Minimum sum assured is Rs. 25,000.

b) Minimum premium paying term is 5 year and maximum

20 year

c) Tax benefit is available

d) Maturity amount = Four equal installment of sum insured

in last four year plus vested bonus in the last year

e) Loan facility is available

4) Reliance Endowment Plan: -

Projects, Thesis, Dissertation – 39

Reliance Life Insurance’s Reliance Endowment Plan is the key to all your
financial needs. It is an inexpensive and easy way to protect you, your
family or your business.

In a nutshell this plan will keep you financially prepared for all the special
occasions in your life - your daughter’s wedding, your child’s university
education or even a new office for your business - by eliminating the burden
that a shortage of money creates.

In the event of your untimely death, Reliance Endowment Plan will also
assist your loved ones through this difficult time by the financial support that
it provides.

Reliance Endowment Plan also gives you the additional benefit of

participating in the company’s profits, which you will receive at the end of
the policy period.

™ Features: -

a) Entry age minimum is 5 year and maximum 65 year

b) Maturity age minimum is 18 year and maximum 75 year

c) Minimum premium paying term is 5 year and maximum 35

year in case of regular and in case of single 15 year

Projects, Thesis, Dissertation – 40

d) Minimum sum assured is Rs. 25,000 or as determined by the
minimum premium

e) Maximum sum assured is Rs. 5,00,000 (entry age below 18

years and no limit for entry age 18 and above)

f) Premium mode annual, half yearly, quarterly and monthly

(by salary deduction only)

g) Loan up to 90% of the surrender value of the policy

h) Maturity amount = Guaranteed sum assured + Reversionary


5) Reliance Special Endowment Plan: -

This insurance policy is designed for people who wish to combine savings
with extended security. The unique feature of this policy is that life
protection continues for five years after you have stopped the payment of
premium. Payment of sum assured at the end of premium paying term and
extension of life cover thereafter for the full sum assured for a period of 5
years, are characteristics of the policy.

This plan also participates in the profits.

™ Features: -

a) Entry age minimum 12 year and maximum 65 year

b) Minimum sum assured is Rs. 25,000
c) Minimum premium paying term is 10 year and maximum 40

Projects, Thesis, Dissertation – 41

d) Unique feature of this policy is that five year life protection
continues after you have stopped the payment of premium
e) Tax benefit is available
f) Under this policy bonus is compounded yearly
g) Loan facility is available
h) Maturity amount = Full sum assured before maturity date +
Vested bonus at the time of maturity date

6) Reliance Cash Flow Plan: -

This insurance policy is designed for those who have a recurring need for
reinvestment in business or look for short-term investment channels. The
advantage of the policy is that they need not part with a sizable amount of
money at any one time, but create, through regular premium payments, a
periodic return of lump sums which become available for reinvestment at
higher returns, while providing simultaneously, substantial life cover.

Alternatively, it can be used to meet any immediate financial crisis in the

family like your son's college admission, your daughter's engagement, and
renovation of your home or perhaps, a holiday abroad.

The money is payable in installments. The first installment is paid at the end
of the 4th year and thereafter at the end of every 3rd year.

™ Features:-

a) Plan with profits

b) Minimum entry age is 15 year and maximum is 63 year

Projects, Thesis, Dissertation – 42

c) Maximum premium paying term is 34 year
d) Loan facility is not available
e) In case of death full sum assured + accrued bonuses up to
the date of death is payable immediately
f) In case of survival up to maturity date all premium paid
g) Rider accident death and critical illness
h) Mode of payment is available

7) Reliance Credit Guardian Plan: -

This insurance policy is designed for those who not only safeguards
individuals but also families and businesses from the financial hardship that
could arise from unfortunate and unexpected death.

™ Features: -

a) Loan protection against home, home improvement, two

wheelers and four wheelers
b) In case of death remaining loan amount paid immediately
c) In case of survival no benefit is available
d) Premium payment option for single and regular is available
e) Premium paying term is 2/3 of loan period and remaining
period paid by the company

8) Reliance Special Credit Guardian Plan: -

Projects, Thesis, Dissertation – 43

This insurance policy is designed for those who not only safeguards
individuals but also families and businesses from the financial hardship that
could arise from unfortunate and unexpected death, disability or critical

™ Features: -

a) Loan protection against home, home improvement, two

wheelers and four wheelers
b) In case of death remaining loan amount paid immediately
c) In case of survival no benefit is available
d) Premium payment option for regular and single is available
e) Premium payment term is 2/3 of loan period and remaining
period paid by the company
f) Maturity amount = All the premium paid amount
g) Tax benefit is available


A unit-linked policy is a life assurance policy in which the benefits

depend on the performance of a portfolio of shares.

Projects, Thesis, Dissertation – 44

Each premium paid by the insured person is split: a part is used to
provide life assurance cover, while the balance (after the deduction of costs,
expenses, etc.) is used to buy units in a unit trust.

In this way, a small investor can benefit from investment in a managed

fund without making a large financial commitment. As they are linked to the
value of shares, unit linked policies can go up or down in value.
Policyholders can surrender the policy at any time and the surrender value is
the selling price of the units purchased by the date of cancellation 9less
expense). A small part of the contribution is used for providing life cover
and the balance is invested in unit. Legal heirs are entitled to the amount of
insurance cover and entitled units in case of death of the insured.

Reliance Life Insurance Company Limited has also offered the two
Unit Linked Plans, which are listed as follows:

1) Reliance Market Return Plan

2) Reliance Golden Years Plan

Amongst the above plans the Reliance Market Return Plan is the
largest selling plan of the Reliance Life Insurance Company Limited. The
above two ULIP plans are discussed as follows:

1) Reliance Market Return Plan: -

Reliance Market Return Fund is the unit-linked product that helps you invest
in the financial markets in a combination of investment instruments of your

Projects, Thesis, Dissertation – 45

choice. You can enjoy the returns from the markets without the trouble of
monitoring and managing your own investment portfolio and keeping track
of the market movements. At the same time your investment premiums
provide you with insurance cover. Reliance Market Return Fund unit-linked
insurance plan provides you with a basket of fund options that balances your
return and risk exposure while providing life cover at the same time.

™ Features: -

a) Minimum entry age is 30 days and maximum entry age

is 65 year
b) Maximum policy term 40 year and minimum policy
term 5 year
c) Mode of premium as annual, quarterly, half yearly and
monthly Rs. 1000 (for salary deduction only) and Rs.
2500 (standing order/credit card)
d) Top up premium minimum Rs. 2500
e) Option of investment fund
i. Capital secure 100% fixed interest securities
ii. Balanced minimum 80% fixed interest securities
and maximum 20% in equity
iii. Equity 100% equity
iv. Growth minimum 60% fixed interest securities and
maximum 40% in equity
f) Loan facility is not available
g) One switches every year free and subsequent switches
charged 1% of the amount switched

Projects, Thesis, Dissertation – 46

h) Partial withdrawals per year under regular and single
premium options is 2 times
i) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawals
is Rs. 10,000

2) Reliance Golden Years Plan: -

Reliance Golden Years Plan….. The Reliance Life Insurance ‘no-worry stay
happy’retirementplan. Reliance Golden Years Plan is a flexible package that
provides freedom of choice in choosing the type of investment, life cover,
vesting options such as commuting and annuity options. Contributions
provide Income tax savings as well.

Reliance Golden Years Plan, a flexible pension product is available for all
individuals who are between the ages of 18 and 65.

™ Features: -

a) Entry age minimum is 18 year and maximum 65 year

b) Minimum premium amount Rs. 10,000 and maximum
is unlimited
c) Mode of premium payment is available
d) Pension plan with risk cover and without risk cover

e) Choice of investment

Projects, Thesis, Dissertation – 47

i. Capital secure fund – 80% in equity and 20% in
government security
ii. Balanced fund – 80% in government and 20%
in equity
f) No loan facility is available
g) Tax benefit is available
h) Annuity options
i. Annuity payable for life
ii. Annuity payable for 5/10/15 years certain and
thereafter with life
iii. Annuity payable for life with return of capital
on death of the annuitant


Projects, Thesis, Dissertation – 48


Recruitment is the process of finding and attracting capable applicants for

employment. The process begins when new recruits are sought and ends
when their applications are submitted. The result is a pool of applicants from
which new employees are selected.

Projects, Thesis, Dissertation – 49

In this company the Sales Manager, who recruits the advisors/agents for
selling the products of the company, does the recruitment. The advisors
should have at least passed the S.S.C. examination. They must pass the pre-
recruitment examination, which is conducted by the Insurance Institute of
India, Mumbai, or any other approved examination body. After clearing the
examination the code will be provided to them and the license will also be
given to them, the validity the license would be 3 years. After all these
requirements, the person will become an insurance advisor in the company.


Selection is the process of picking individuals (out of the pool of job

applications) with requisite qualifications and competence to fill job in the
organization. In simple words, it is the process of differentiating between
applicants in order to identify these with a greater likelihood of success in a

The Branch Manager, which includes-, will conduct the process of selection
of Sales Manager

1) Personal Interview: -
The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interview
of an applicant by the Branch Manager.

Projects, Thesis, Dissertation – 50

2) Project 40 Interview: -
After clearing the personal interview, the project 40
interview will be taken by the Branch Manager. In this step, the applicant
should have to make a list of 40 and then start the business with them.

3) Interview with Regional Head: -

After clearing the project 40 interview, the applicant
should be interviewed by the Regional Head, who will check his/her

4) Negotiation: -
After clearing the interview with Regional Head, the
negotiation will be provided to the applicant.

5) Medical Examination: -
After that, the medical check up should e made to the

6) Selection: -
After clearing all the above steps the applicant should be
appointed/selected as a Sales Manager in the company.

Projects, Thesis, Dissertation – 51

™ Requirements of Sales Manager:-

The Sales Manager should possess the

following things-

1. They should be an M.B.A.

2. The age of them should be between 25 to 35 years.
3. They should have good communication skill.
4. They should have at least sales experience of 3 years.
5. They should have the capability to handle the team.
6. Their job profile includes recruitment, training, guiding, motivating
and in turn getting business out of a team.


Training and Development is any attempt to improve current or future

employee performance by increasing an employee’s ability to perform
through learning usually by changing the employee’s attitude or increasing
his/her skills and knowledge. The need for training and development is
determined by the employee’s performance deficiency, computed as follows:

Projects, Thesis, Dissertation – 52

Training & Development = Standard Performance – Actual Performance

They are providing 100 hours training to their advisors, who

are newly recruited. They are also providing the product training to their
advisors and Sales Managers, who are newly recruited. The 100 hours
training is to be conducted at Net Bios Computer Academy whereas the
product training is to be conducted at NIS SPARTA. The NIS SPARTA
Institute has more than 150 batches and is trained over 3000 agents for most
of the private insurance companies. This institute is approved by IDRA to
train agents/advisors.


They are also providing career development plans, which will identify
potential and create avenues for growth.


Communication is the process through which an individual can exchange

their beliefs, things, information, and experience to others. In simple words,
it is the process of exchanging the information from one person to another.

They are providing an open environment, which enabling free interaction

between all levels. The communication is provided in the following manner:

Projects, Thesis, Dissertation – 53

Projects, Thesis, Dissertation – 54







Projects, Thesis, Dissertation – 55

™ Explanations of the diagram:-

The communication is flow between Branch to Branch.

Within a branch, it flows between Branch Manager to Sales Managers and
Sales Managers to Agents/Advisors, and then Branch Head to Regional
Head, then different Regional Head to Regional Head, then Regional Head
to Channel Head, then to Chief Marketing Officer (CMO), then to Chief
Executive Officer (CEO).


Incentives are monetary benefits paid to workmen in recognition of their

outstanding performance. They are providing an aggressive reward and
recognition plans, which are including sales incentives.


They are offering following certain services to their employees.

1) They are providing knowledge sharing and certification practices.

2) They are planned team building and fun events.
3) They are creating Reliance Life Insurance family, which includes
employees, associates and their families.

Projects, Thesis, Dissertation – 56

4) Reliance Life Insurance in a team building mode and is looking for
performance driven, achievement oriented and challenge loving


Performance appraisal is the systematic evaluation of the individual with

respect to his/her performance on the job and his/her potential for
development. Performance appraisal is a formal, structured system of
measuring and evaluating an employee’s job related behaviors and outcomes
to discover how and why the employee is presently performing on the job
and how the employee can perform more effectively in the future so that the
employee, organization and society all benefit.

They are providing a balanced scorecard approach for strategy deployment

and performance measurement, which goals and measure financial, customer
focused, process related and employee development related initiatives. In
addition to this, the Branch Manager should measure the performance of the
Sales Managers at every six months and the Sales Manager should measure
the performance of the advisors/agents. If the performance is best then
he/she will be prompted.

Projects, Thesis, Dissertation – 57




Channel Head

Regional Head

Branch Head





They are providing following areas or departments:

1) Retail Sales
2) Under Writing
3) Actuarial
4) Insurance Operations
5) Customer Service
6) Quality and Processes
7) Human Resources

Projects, Thesis, Dissertation – 58

8) Finance



Projects, Thesis, Dissertation – 59


Reliance Life Insurance Company Limited is using five types of

distribution channel, which are as follows:

1) Agency: -

Independent insurance agents represent a number of companies

and can research these companies’ products to find the right combination
for their clients. Independent agents & insurance producer groups are
growing in prevalence. Although producer groups are in their infancy,
their emergence may potentially be realignment in the distribution of
financial services. Independent shops realized that by pooling production
and funding a central support office, they had increased buying power.

The one type of distribution channel, which Reliance Life

Insurance Co. Ltd is using, is an agency. This channel works as follows:





Projects, Thesis, Dissertation – 60

2) Bank Assurance: -

While a lot of bank relationships with insurance companies

have been established, life insurance sales have been slower than one
would expect he primary bank insurance activities have been the
distribution of annuities, credit life, and direct marketing insurance.
Banks are failing to incorporate successful sales tactics used to sell other
financial services like investments.

Another type of distribution channel is bank assurance. This

channel is tie up with banks. In this channel the advisors using or
targeting the bank customers to make a business with them i.e., to sell the
policy of the company.

3) Corporate:-

To gain a better understanding of the demand amongst

independent advisors for trust services and to gain a better feel for how
independent advisors handle trust services, a research was performed
with independent advisors across several broker/dealers and custodians.
The interviews revealed that demand is greatest for living trusts among
independent advisors, followed by demand for corporate trustee services.

Another type of distribution channel is corporate, which are

for employee benefits. This channel is tie up with corporate or small
enterprises. Through these small enterprises, the advisors will sell the
products/policy to customers of the small enterprises.

Projects, Thesis, Dissertation – 61

4) Rural Benefits:-

Brokerage firms have gained much of the institutional and

personal trust business lost by the banks. These firms have steadily
captured assets, primarily at the expense of the banks. The number of
non-bank trust companies has increased in recent years as independent
trust companies have emerged and more broker/dealers are integrated
services. Insurance companies view full-service brokers as a potentially
new distribution channel as well.

Another type of distribution channel is rural benefits. This

channel works as a dealership. In this channel, the dealers will sell the
policy to the target customers.

5) Web World:-

Direct sales of life insurance are growing rapidly, but many of

the traditional full-serve players seem to be letting it go. Across all
financial services, consumers are expressing a willingness to deal with a
variety of providers on the web. Web sites are starting to pop up offering
consumer insurance products especially designed for distribution over the

Another type of distribution channel is web world. This channel

is tie up with customer database. In this channel, the advisors will sell the
policy to the target customers, which are taken from the customer
database, are listed in the website.

Projects, Thesis, Dissertation – 62


Promotional programmes and target segment are related to each other.

The promotional programmes are made to motivate the advisors/agents
and sales managers to do more business i.e., to sell the more policies. The
Reliance Life Insurance Co. Ltd has made three promotional schemes,
which are as follows:

1) Shubh – Arambh:-

This promotional scheme is detailed as follows:



Projects, Thesis, Dissertation – 63

30,000 Reliance Life T-Shirt
50,000 Table Top Clock
75,000 Leather Bag
1,00,000 World Space Radio
1,50,000 L.G. Microwave- 19L
2,00,000 DVD/VCD/MP3 Player
3,00,000 Sony Music System


5,00,000 LG Refrigerators GL-233

7,50,000 LG Air Conditioner 1T
10,00,000 Sony Digital Camcorder
15,00,000 Trip to Dubai 3D/4N
20,00,000 Hero Honda Splender


50,00,000 Maruti Alto Std.

75,00,000 Maruti Swift Lxi
1,00,00,000 GM Aveo 1.4LS

Login: 1st April to 31st May ‘06

Issuance till 15th June ‘06

2) R.A.R.E.:-
The full form of R.A.R.E. is Reliance Advisor’s Reward
Experience. This programs consists of

1. New Advisor Incentive Program

2. Board of Advisors

Projects, Thesis, Dissertation – 64

3. Annual Discovery Series
4. Advisor Career Progression
5. RARE Club – Loyalty Program

The above programs are described as follows

1. R.A.R.E. Program New Advisor Incentives:-

¾ Criteria
There will be two levels in the New Advisor Incentive
A. Launch Pad
B. Take Off

2. R.A.R.E. Program Board of Advisors:-

¾ Criteria
There will be two levels in the Board of Advisors program
A. Time Period
B. Parameters

3. R.A.R.E. Program Discovery Series:-

¾ Criteria
There will be six levels in the Discovery Series program
A. Qualification period
B. Business criteria

Projects, Thesis, Dissertation – 65

C. The qualification criteria will be the same for both the Global
and the National Discovery Series
D. Qualification for the Global Discovery Series
E. Qualification for the National Discovery Series
F. The top 150 will bb calculated based on WRP (Weighted Recd

4. R.A.R.E. Program Advisor Career Progression:-

¾ Advisor Career Progression

A. Business Associate
B. Sales Manager

5. R.A.R.E. Privilege Club:-

¾ Levels
A. The RARE Club will have 6 different levels
B. The criteria for entry into each level will be based on
I. Business (WRP)
II. Persistency
III. Product Mix
C. The qualification period is
I. Logins from 1st Apr ’06 to 31st Mar ‘07
II. Issuances from 1st Apr ’06 to 15th Apr ‘07

¾ Qualification Criteria

Projects, Thesis, Dissertation – 66

Level WRP (Rs) Traditional Persistency
Topaz 1,50,000 60% 80%
Pearl 5,00,000 60% 80%
Sapphire 10,00,000 60% 80%
Emerald 15,00,000 50% 85%
Ruby 25,00,000 50% 85%
Diamond 50,00,000 50% 85%

3) Elite Club Scheme:-

In this scheme the advisor, who have login the regular
premium of Rs. 2, 00,000 will be eligible for the Elite Club


Presently there are 15 Life insurance companies in the country.

There is only one public sector company LIC and the rest 14 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.

Projects, Thesis, Dissertation – 67

1) Major Market Players: -

¾ 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 2005-
06 was 1.89%.

¾ 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 for FY 2005-06 was 2.87%.

¾ 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 2005-06 was 7.35%.

¾ Life Insurance Corporation of India (LIC): -

Life Insurance Corporation 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 2005-06
was 71.44%.

¾ Kotak Mahindra OLD Mutual: -

Projects, Thesis, Dissertation – 68

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 2005-06
was 1.11%.

¾ 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 2005-06 was 1.23%.

¾ Aviva Life Insurance India: -

Aviva Life insurance is a 74:26 joint venture between Aviva and

Dabur. It is a private sector company. The company was registered on
14/5/2002. The market share for FY 2005-06 was 1.14%.

¾ 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 FY 2005-06 is 0.79%.

¾ Met Life India: -

Projects, Thesis, Dissertation – 69

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 2005-06 was 0.40%.

¾ Bajaj Allianz Life Insurance Co.: -

Bajaj Allianz Life Insurance Company 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 2005-06 was 7.56%.

¾ 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 2005-06 was 2.31%.

¾ The TATA AIG 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 2005-06 was 1.29%.

¾ Sahara India Life Insurance Company Ltd.: -

Projects, Thesis, Dissertation – 70

First Wholly Indian Owned Private Life Insurance Company.
The Company commenced operations from 30th October 2004. The market
share for FY 2005-06 was 0.06 %.

¾ Shriram life insurance company Ltd: -

Shriram Life is a recent entrant into the life insurance sector

It is a 74:26 joint venture between the Shriram group through its Shriram
Financial Holdings and Sanlam Life Insurance Limited, South Africa. The
company expects to start operations soon.

2) Market Share: -

Sr. No Insurer Market Share (%)

1 LIC 71.44

2 Bajaj Allianz 7.56

3 ICICI Prudential 7.35

4 HDFC Standard 2.87

Projects, Thesis, Dissertation – 71

5 SBI Life 2.31

6 Birla SunLife 1.89

7 Tata AIG 1.29

8 Max New York 1.23

9 Aviva 1.14

10 Kotak Mahindra OLD Mutual 1.11

11 ING Vysya 0.79

12 Reliance Life 0.54

13 MetLife 0.4

14 Sahara Life 0.06

15 Shriram Life 0.03

Now let’s depict the market share of these players on diagram

Projects, Thesis, Dissertation – 72

Market Share(%) 2 B ajaj A llianz

3 ICICI P rudential

4 HDFC Standard

5 SB I Life

6 B irla SunLife

7 Tata A IG

8 M ax New Yo rk

9 A viva

10 Ko tak M ahindra OLD

M utual
11ING Vysya

12 Reliance Life

13 M etLife

14 Sahara Life

15 Shriram Life

Here we can see from the diagram that LIC is the market leader and it
commands the major part of the total life insurance market. Its market share
was approximately 98% before 2000 but after the entry of private players it
has significantly decreased.

Among private players Bajaj Allianz stands first. It has the market share of
approximately 7.56% in the total market and it constitutes 40% of the market
share among private players.

HDFC Standard comes third. SBI Life insurance Company Limited comes
fourth. ICICI Prudential is also one of the fastest growing life insurance
companies in India.

Rest of the players has market share below 2%.

Projects, Thesis, Dissertation – 73

3) Capital Fund: -

Capital Fund of Private Companies

( Rs in Crore )
ICICI Prudential 375
Max New York 250
HDFC Standard 218
Bajaj Allianz 200
Tata AIG 183
Birla Sun Life 180
OM Kotak 153
Reliance Life 126
SBI Life 125
Met Life 110
ING Vysya 110

Projects, Thesis, Dissertation – 74


Projects, Thesis, Dissertation – 75


1) To get some good market exposure by dealing with the prospects

face to face.

2) To improve our ability to sell a financial product like life


Projects, Thesis, Dissertation – 76

3) To know the perception of the consumer about life insurance.

4) To get a deep knowledge of the financial product like insurance.

5) To get some information about the market share of Reliance Life

Insurance as compared to the giants like LIC and to know the
standing of the company in the market.


It is most common instrument whether administered in person

by phone or online questionnaires are very flexible. The form of each
question is also important. Closed end question include all the possible
answers and subjects matters choices among them.

I have used open-end questions so that customers can write

answer in their own words.

I have also used closed-end questions, which provide

answers that are easier to interpret and tabulate. I have taken care in the
wording and ordering of questions. I have used simple, direct, unbiased
wording questions, which are arranged in a logical order. I have asked
personal questions at last so that respondent does not become defensive.

Projects, Thesis, Dissertation – 77

¾ Questionnaire of the customer

I have made questionnaire consisting seventeen questions to

get customer’s view about life insurance. I have asked personal questions
at last so that they do not become defensive. I have tried to know their
performance i.e. whether they want to invest, where thy want to invest,
up to what amount and since when.


¾ Introduction:-

Any organization whether big or small, private or public need

different types of information are to know its popularity. I have gathered
secondary data and primary data and collected information from the
combination of these two data.

ƒ Secondary data: -
Secondary data consist of information that already exists somewhere,
having been collected for another purpose. I have gathered secondary data
from website of different operators, different magazines, newspapers and

ƒ Primary data: -

Projects, Thesis, Dissertation – 78

I have taken great care while collecting primary data to answer that it is
relevant, accurate, current and unbiased. I have taken a sample of 50 people.
I have visited them personally to get data.

ƒ Sample size: -
I have taken sample size of 50 respondents. Because the population is too
large so it is difficult to survey.


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.

Projects, Thesis, Dissertation – 79

1) The sample size of 50 might not represent the perception of whole
population, as the sample size is too small for total population of
Ahmedabad 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 more time

then studies will be more effective.

There are some limitations of this study. But in spite of their limitation I
worked with the enthusiasm. And I tried to give the best results to the
research of this report.


Here I have formed a questionnaire to study why people go for life

insurance. What is people’s major motive behind investing in life insurance?
Do they decide upon their own or they take guidance of an agent? What is
their perception about Reliance Life Insurance Company Limited?

Projects, Thesis, Dissertation – 80

¾ Questions:-

There are 7 questions in the questionnaire. Out of these 7 questions, 6

questions are close ended and one question is an open ended one.

¾ Target Population:-

I had conducted this survey among 50 people, and the target group was a
mix of people from the society. I asked the questions to Doctors,
Professionals, Professors, Advocates, Engineers, and general public.

¾ Analysis:-

I have used pie charts, and some other statistical measures to analyze the

Q.1 What is your main motive behind investing in life insurance?

(a) Tax Benefit
(b) Savings
(c) Risk Cover
(d) Return/Yield

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TAX 20 There could be any motive of

RISK COVERAGE 23 people behind investing in a
RETURN/YIELD 2 life insurance policy. The main
purpose of life insurance is the
Risk cover of one’s life. But some people consider different advantages of a
life insurance policy. Some people consider Tax benefit as the main
advantage of life insurance. Some believe that life insurance is an
investment so they tend to invest in life insurance. While some people
believe that it is a compulsory saving. Now let’s see what all people say




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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

But this is the general conclusion 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.

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

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

Q.2 Rank the above motives according to your preference

1 21 3 24 1
2 19 11 16 4
3 8 25 7 10
4 2 11 3 35

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We can see from the table and the graph that the number one motive of
people about investing in life insurance is risk coverage, which is the main
theme of life insurance followed by Tax benefit. The third position is of
saving and fourth is Return. This shows that still people consider other
financial tools more viable for return and life insurance is for Tax benefit
and risk cover.

Q.3 How do you decide about investing in life insurance?

(a) On my own
(b) family decision
(c) Employer decides
(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar
about different life insurance plans offered by different life insurance

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companies so people take help of the life insurance agent and as he guides
understanding the needs of the individual, people would invest.

Here one hazardous factor is the moral hazard. People tend to invest in life
insurance plans to maintain relations though they are not in need of life
Also sometimes it depends upon the convincing power of the agent.





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

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There is no contribution of employers in the decision of one’s investment in
life insurance. 14% people invest in life insurance as per the family decision.

Q.4. Which life insurance policy would you prefer to buy?

(a) Term Assurance
(b) Whole Life
(c) Endowment
(d) Combination of Whole Life and Endowment
(e) Unit Linked

This is another crucial question as there are number of products offered by

life insurance companies. The products range from pure Term Assurance
Plans to Unit Linked Insurance Plans, which are relatively new entrant in the

We have already explained all these policies ahead.

Now let’s find out what people have to say:

Type of policy N0.

Term Assurance 9
Whole Life 9
Endowment 7
Combined 19

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Whole Life




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 the amount would be paid when the person dies.

Q.5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy?
(a) Reliance Life Insurance
(b) LIC

This is the most important question as it reflects the scope of the study. It is
the main theme of this questionnaire.

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Prior to 2000 LIC was the only player in the life insurance market and it had
the total market. So people had to go to LIC for buying life insurance policy.
But after the entry of private players in 2000, some people have also turned
to private life insurers.

Reliance Life Insurance Company Limited is newly launched company. So it

has fewer customers as compared to LIC. But the ULIP plans are sold more
of Reliance life insurance as compared to LIC in today’s environment.

Now let’s see what people say:

Particulars No.

Reliance Life Insurance 15

LIC 35

Reliance Life

As evident from the chart that 30% of people would prefer Reliance Life
Insurance while 70% would prefer LIC.

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™ Personal Details: -

1) Age
(a) 18 to 30
(b) 31 to 50
(c) 51 to 65

Age No.

18 to 30 5
31 to 50 30
51 to 65 15

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18 to 30
31 to 50
51 to 65

As evident from the chart that I have taken a sample of 50. Out of
which 10% people are aged between 18 to 30, 60% people are aged between
31 to 50, and remaining 30% people are aged between 51 to 65.

2) Occupation

(a) Service

(b) Business

(c) Profession

(d) Housewife

(e) Retired

Occupation No.

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Service 5
Business 15
Profession 10
Housewife 5
Retired 15


As the evident from the chart that out of 50 respondents 10% are of service
men, 30% are of business men, 20% are of professions, 10% are of
housewives and remaining 30% are of retired.

3) Income

(a) 50,000 to 1,00,000

(b) 1,00,000 to 5,00,000

(c) More than 5,00,000

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Income (Per Annum) No.

50,000 to 1,00,000 10
1,00,000 to 5,00,000 25
More than 5,00,000 15
TOTAL 50,000 to 50

1,00,000 to

More than

As the evident from the chart out of 50 respondents 20% are earning
annually between 50,000 to 1,00,000, 50% are earning between 1,00,000 to
5,00,000 and 30% are earning more than 5,00,000.

4) Family members

(a) 2

(b) 3

(c) 4

(d) More than 4

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Family Members No.

2 5
3 15
4 20
More than 4 10

More than 4

As the evident from the chart out of 50 respondents 10% have 2 family
members, 30% have 3 family members, 40% have 4 family members and
remaining 20% have more than 4 family members.


SWOT analysis is the analysis of the internal and external factors, which
have impact on the survival of any organization. Now let’s make SWOT
analysis for reliance Life Insurance Company Limited.

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1) Reliance Life Insurance Company Limited is the part of the

Reliance Capital.

2) The brand name is enough to sell the products easily.

3) Private placement of Rs. 10,000 crs 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 products

6) Reliance has a long and strong history of solvency, financial



1) Newly established company, so people seems it risky.

2) Lack of staff.

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3) Lack of advertisement, so most of the customers are not aware
of the Reliance Life Insurance.


1) There is a vast untapped market in India. The life insurance

penetration in India is approximately 2.5%. So it has large

2) Intention of traditional products is to encourage long term,

regular and disciplined savings to systematically build up a
target fund.

3) The average insurance premium being collected by the

company has been growing exponentially year on year.


1) The main threat is from the other players who have grabbed
approximately 15% of the market share.
2) As the government has scrapped the rebate on the life insurance
premium, the people who used to invest in life insurance for the
sole motive of tax benefit may turn to other instruments.



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There are four fund options, which Reliance Life Insurance

Company Limited has offered, which are as follows:

Projects, Thesis, Dissertation – 96

1) Capital Secure Fund:-

This fund is for Reliance Golden Years Plan, and Reliance

Market Return Plan.

In line with the objective of protecting the capital against any erosion, 61.4%
of the funds were invested in short-term Government Securities (Gilts) and
to meet liquidity requirement higher about 40% of funds are kept in short
term bank deposits. The net return credited to policyholders and the asset
composition ratios are given in the boxes below.

Net Returns during last 1 month (Mar.’06) 0.36%

Net Returns during the last 3 months (Jan.-Mar.’06) 1.10%
Net Returns during the last 12 months (Apr.’05-Mar.’06) 4.09%
Net Returns since Inception in Feb’03 (Annualized) 3.89%

Bank Fixed Deposits

Asset Name % of total assets
Total Bank Deposit 38.60
6.75% GOI 2006 6.75
11.68% GOI 2006 13.69
11.75% GOI 2006 40.96

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Total Gilts 61.40
Total 100.00

¾ Asset Allocation:-

Bank Deposits

2) Balanced Fund:-

This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan.

To take advantage of the bullish trend in the equity market, the

equity holdings in the fund was maintained as close as possible to the
maximum of 20% allowed for the fund. Bank deposits were maintained only
for the purpose of liquidity management. To reflect their bearish view on the
debt market the duration of the fixed income portfolio was kept low. Within
the fixed income portfolio, allocation to Gilts was higher than corporate
bonds. All the bonds in the portfolio are top rated. The asset composition,
the details of the portfolio and the net returns are disclosed below.

Net Returns during last 1 month (Mar.’06) 2.47%

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Net Returns during the last 3 months (Jan.-Mar.’06) 4.07%
Net Returns during the last 12 months (Apr.’05-Mar.’06) 13.83%
Net Returns since Inception in Feb’03 (Annualized) 13.10%

Asset Name % of Total Asset

Equity 20
Corporate Bonds & Debentures 22
Gilts 53
Bank Deposits 5
Total 100.00


Corporate Bonds
& Debentures

Bank Deposits

3) Growth Fund:-

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This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan.

To take advantage of the bullish trend in the equity market, the equity
holdings in the fund was maintained as close as possible to the maximum of
20% allowed for the fund. To reflect their bearish view on the debt market
the duration of the fixed income portfolio was kept low. All the bonds in the
portfolio are top rated. The asset composition, the details of the portfolio and
the net returns are disclosed below.

Net Returns during last 1 month (Mar.’06) 4.60%

Net Returns during the last 3 months (Jan.-Mar.’06) 7.99%
Net Returns during the last 12 months (Apr.’05-Mar.’06) 24.90%
Net Returns since Inception in Feb’03 (Annualized) 21.04%

Asset Name % of Total Asset

Equity 9
Corporate Bonds & Debentures 40
Gilts 45
Bank Deposits 6
Total 100.00

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Corporate Bonds
& Debentures

Bank Deposits

4) Equity Fund:-

This fund is for Reliance Market Return Plan. In line with the
stated asset allocation pattern and their view of the market, the entire corpus
of the fund was invested in equities. Net returns earned since inception and
the full portfolio are disclosed below.

Net Returns during last 1 month (Mar.’06) 11.18%

Net Returns during the last 3 months (Jan.-Mar.’06) 20.02%
Net Returns during the last 12 months (Apr.’05-Mar.’06) 64.46%
Net Returns since Inception in Feb’03 (Annualized) 57.83%

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Asset Name % of Total Asset
Equity 98.93
Mutual Fund/Bank Deposits 1.07
Total 100.00


Mutual Fund/Bank


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¾ 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.

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¾ Insurance industry is one of the fastest sectors in India. Insurance
sector has been growing by 25% to 30% 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.

¾ 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.
¾ For Reliance Life Insurance, the negative aspect is that its market
share is low.

¾ 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

¾ But the positive impact is that the life insurance awareness has
increased and the business of Reliance Life Insurance has increased.



Projects, Thesis, Dissertation – 104





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¾ Life Time Magazine of Reliance Life Insurance

¾ Net Bios Computer Academy’s Life Insurance Book

¾ Broachers of Reliance Life Insurance



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¾ Questionnaire

Survey by student of R.K.C.B.M.

Life Insurance

NAME: ___________________________________________

Q.1 What is your main motive behind investing in life insurance?

(a) Tax Benefit
(b) Savings
(c) Risk Cover

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(d) Return/Yield

Q.2 Rank the above motives according to your preference


Q.3 How do you decide about investing in life insurance?

(a) On my own
(b) family decision
(c) Employer decides
(d) as per the guidance of agent
Q.4. Which life insurance policy would you prefer to buy?
(a) Term Assurance
(b) Whole Life
(c) Endowment
(d) Combination of Whole Life and Endowment
(e) Unit Linked

Q.5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy?
(a) Reliance Life Insurance
(b) LIC

Projects, Thesis, Dissertation – 108


1) Age
(a) 18 to 30
(b) 31 to 50
(c) 51 to 65

2) Occupation
(a) Service

(b) Business

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(c) Profession

(d) Housewife

(e) Retired

3) Income
(a) 50,000 to 1,00,000

(b) 1,00,000 to 5,00,000

(c) More than 5,00,000

4) Family members
(a) 2

(b) 3

(c) 4

(d) More than 4

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