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Preface--------------------------------------------------- (3)
Certificate------------------------------------------------ (4)
Acknowledgement-------------------------------------- (5)
Index----------------------------------------------------- (7)
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.
INDEX
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
industry.
Right now the insurance industry has great opportunities in a country like
India or China which huge population. Also the penetration of insurance in
The insured event was bound to happen sooner or later under assurance but
the event insured against may or may not happen under insurance.
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.
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
The cause of loss must be direct and an insured one in order to claim of
compensation.
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.
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
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.
There are three parties in a life insurance transaction: the insurer, the
insured, and the owner of the policy (policyholder), although the owner and
Life insurance may be divided into two basic classes – term and permanent.
• 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.
If you want insurance protection only, and not a savings and investment
product, buy a term life insurance policy.
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.
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.
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
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
With the creation of the automobile, public liability insurance, which first
made its appearance in the 1880s, gained importance and acceptance?
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
1) Nomination: -
2) Assignment: -
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: -
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: -
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.
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.
4) Retirement Planning: -
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
children.
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,
CHAPTER-2
2.2 HISTORY
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
2006
4) Web Portal: -
5) R World: -
6) SMS Alerts: -
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: -
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.
2.5 MISSION
Reliance Life Insurance Company Limited has some core values which are
listed as follows:
2.9 BRANCHES
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.
Risk cover
Investment
Health cover
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
Features: -
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: -
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: -
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.
Features: -
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.
Features: -
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.
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:-
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: -
Features: -
Reliance Life Insurance Company Limited has also offered the two
Unit Linked Plans, which are listed as follows:
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:
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
Features: -
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: -
e) Choice of investment
CHAPTER – 4
HUMAN RESOURCE MANAGEMENT
4.2 SELECTION
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.
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
applicant.
6) Selection: -
After clearing all the above steps the applicant should be
appointed/selected as a Sales Manager in the company.
They are also providing career development plans, which will identify
potential and create avenues for growth.
4.5 COMMUNICATION
BRANCH BRANCH
REGIONAL
REGIONAL
REGIONAL
CHANNEL
HEAD
CMO
CEO
4.6 INCENTIVES
4.7 SERVICES
CEO
CMO
Channel Head
Regional Head
Branch Head
SalesCEO
Manager
Advisors/Agents
Customers
4.10 DEPARTMENT
CHAPTER – 5
MARKETING DEPARTMENT
1) Agency: -
Branch
Managers
Advisors
Customers
3) Corporate:-
5) Web World:-
1) Shubh – Arambh:-
ACHIEVERS
SUPER ACHIEVERS
STAR ACHIEVERS
2) R.A.R.E.:-
The full form of R.A.R.E. is Reliance Advisor’s Reward
Experience. This programs consists of
¾ Criteria
There will be two levels in the New Advisor Incentive
program
A. Launch Pad
B. Take Off
¾ Criteria
There will be two levels in the Board of Advisors program
A. Time Period
B. Parameters
¾ Criteria
There will be six levels in the Discovery Series program
A. Qualification period
B. Business criteria
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
¾ HDFC – Standard: -
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%.
2) Market Share: -
1 LIC 71.44
9 Aviva 1.14
13 MetLife 0.4
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
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.
6.2 QUESTIONNAIRE
¾ Introduction:-
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
libraries.
Primary data: -
Sample size: -
I have taken sample size of 50 respondents. Because the population is too
large so it is difficult to survey.
6.4 LIMITATIONS
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.
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
questions.
TAX
SAVING
RISK
COVERAGE
RETURN/YIELD
Saving motive constitutes very small part of the total sample. Return comes
last.
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.
MOTIVE OF INVESTMENT
TAX BENEFIT SAVINGS RISK COVER RETURN/YIELD
Preference
1 21 3 24 1
2 19 11 16 4
3 8 25 7 10
4 2 11 3 35
4
en
er
ef
Pr
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.
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
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
insurance.
Also sometimes it depends upon the convincing power of the agent.
SOURCE NO.
ON MY OWN 29
FAMILY DECISION 7
EMPLOYER DECIDES 0
AGENT GUIDANCE 14
TOTAL 50
ON MY OWN
FAMILY
DECISION
EMPLOYER
DECIDES
AGENT
GUIDANCE
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.
Term Assurance 9
Whole Life 9
Endowment 7
Combined 19
ULIPs 6
TOTAL 50
Endowment
Combined
ULIPs
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.
Particulars No.
Reliance Life
Insurance
LIC
As evident from the chart that 30% of people would prefer Reliance Life
Insurance while 70% would prefer LIC.
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
TOTAL 50
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.
Service
Business
Profession
Housewife
Retired
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
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
1,00,000 to
5,00,000
More than
5,00,000
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
2 5
3 15
4 20
More than 4 10
TOTAL 50
2
3
4
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.
4) Strong liquidity from FII was the major reason for the up move.
5) Range of products
▼WEAKNESSES:
2) Lack of staff.
☼ OPPORTUNITY:
● THREATS:
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.
CHAPTER – 7
FINANCE DEPARTMENT
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.
¾ Asset Allocation:-
Gilts
Bank Deposits
2) Balanced Fund:-
This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan.
Equity
Corporate Bonds
& Debentures
Gilts
Bank Deposits
3) Growth Fund:-
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.
Corporate Bonds
& Debentures
Gilts
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.
Equity
Mutual Fund/Bank
Deposits
CHAPTER – 8
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.
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
value.
¾ But the positive impact is that the life insurance awareness has
increased and the business of Reliance Life Insurance has increased.
CHAPTER – 9
¾ www.indiainfoline.com
¾ www.bimaonline.com
¾ www.google.com
CHAPTER – 10
ANNEXURE
NAME: ___________________________________________
MOTIVE OF INVESTMENT
TAX BENEFIT SAVINGS RISK COVER RETURN/YIELD
Preference
1
2
3
4
Q.5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy?
(a) Reliance Life Insurance
(b) LIC
1) Age
(a) 18 to 30
(b) 31 to 50
(c) 51 to 65
2) Occupation
(a) Service
(b) Business
(d) Housewife
(e) Retired
3) Income
(a) 50,000 to 1,00,000
4) Family members
(a) 2
(b) 3
(c) 4