Summer Internship Project Report on Marketing at Reliance Life Insurance Company Ltd.

Submitted By:ID No. :D1113SSISBEPGP10187 (PUN-4-CT-410) Batch :- SS11-13 Section :- SC4 Email ID:ankit.609@rediffmail.com Mob. No.:- 9650928722

Ankit Kumar

DECLARATION I hereby declare that this project work entitled Survey of 50 prospective customers & 50 existing customer write Reliance Life Insurance & TATA AIG is my work.

ACKNOWLEDGEMENT

It gives me immense pleasure to express my deep sense of gratitude to (PROF) Ranjan Paul for his valuable guidance and consistent supervision throughout the course. I am also thankful to Mr. Yogesh Aanad(Area manager),mr. Hari Mohan Kaushik(Business Development Manager),Mr. Abhishek Ranjan(Manager sales),Mr. Rahul singhaniya(sales training manager),Mrs. Asima siddiqui(Master Trainer) my Company Guide of Reliance Life Insurance Company LTD, New Delhi, for his valuable guidance for preparing the Final Report. I am indebted to our other faculty members, my friends who gave their full-fledged co-operation for successful completion of my project. It was an indeed learning experience for me.

Ankit Kumar

CHAPTER No. 01 07-08

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1.1. Abstract .. 1.2. Introduction ... 1.2.1. Insurance Industry ... 1.2.2. About the Project .. 1.2.3. Purpose of the Project .. 1.2.4. Scope of the Project .. CHAPTER NO. 02 2. Review of Literature 2.1. About Insurance Industry in Brief 2.2. Logic of Insurance 2.3. Need of Insurance 2.4. Insurance in India 2.5 History of Insurance in India 2.6 Life Insurance Corporation Act. 1956 .. 2.7 General Insurance Business CHAPTER NO. 03 3.1. Insurance Regulatory and Development Authority of India, Act CHAPTER NO. 04 4.1. Different Insurance Companies .. 4.1.1. Top 10 Insurance Companies in India.. 4.2. Market share of Indian Insurance Companies ... 4.3. Booming Insurance Market .. CHAPTER NO. 05 5.1. Advantage of Life Insurance . CHAPTER NO. 06 6.1. Type of Insurance product .. 6.1.1. Term Insurance Plan .. 6.1.2. Endowment Assurance Plan ... 6.1.3. Money Back Policy. 6.1.4. Whole life Plan ... 6.1.5. Pension Plan ... 6.1.6. Child Plan ... 6.1.7. ULIP .. CHAPTER NO. 07 7. 1. Marketing mix in Insurance Industry .. 7.1.1. Introduction .. 7.1.2. Insurance Marketing .. 7.1.3. Marketing mix for Insurance Company . 15

07 07-08 08 08 08 08 08-11 08 08-09 09 09 09 09-11 11 11 11 11 12-14 12 12 13 13-14 14-15 14-15 15-16 15 15 16 16 16 16 16 17-20 16 16-17 17 17
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7.1.3.1. Product. 7.1.3.2. Price . 7.1.3.3. Place . 7.1.3.4. Promotion .. 7.1.3.5. People .. 7.1.3.6. Process ... 7.1.3.7. Physical Distribution. CHAPTER NO. 08 8.1. Customer For Reliance Insurance Company CHAPTER NO. 09 9.1. Changing face of Indian Insurance industry 9.1.1. India The next Insurance Giant CHAPTER NO. 10 10.1. Valuing the invaluable . 10.1.2. Cover Insurance . CHAPTER NO. 11 11.1. Profile of the Company . 11.1.1. About Reliance Life Insurance Company Ltd.. 11.1.2. Corporate Objective . 11.1.3. Corporate Mission . CHAPTER NO. 12 12.1. Other Player in Insurance Industry 12.1.1. Birla Sun Life ... 12.1.2. Life Insurance Corporation of India.. 12.1.3. National Insurance Company Ltd. 12.1.4. TATA AIG Life Insurance CHAPTER NO. 13. 13.1. Research Methodology 13.1.1. Source 13.1.2. Primary Survey 13.1.3. Secondary Survey 13.1.4. Methodology 13.1.5. Sample design . 13.1.5.1. Sampling Frame 13.1.5.2. Sampling Technique . 13.1.5.3. Sample Size . 13.1.6. Data Collection .. 13.1.7. Finding and Interpretation .. 24-25

17-18 18 18-19 19 19 19-20 20 20-21 20-21 21-22 21 22 23-24 23 23-24 24-28 25 25 26-28 28-29 28 28 28 28-29 29 30-37 29 29 29 29 30 30 30. 30 30 30 30-34
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13.1.8. Result .. 13.1.9. Suggestion and Recommendation .. 13.1.10. Conclusion ... 13.1.11. Limitation

34 35 35 35

TABLE & CONTENT OF TATA AIG INSURANCE COMPAMY LTD.

CHAPTER PAGE NO.

PREFACE 36-42 36 36 36-37 37-38 39 39-40 40-42 42-46 42 42-43 43 44 44-45 45-46 46-58 46 46 47 47-49 49-54 55-58 59 60-61

CHAPTER 1 INTRODUCTION TO INSURANCE 1.1 1.4 1.2 1.3 1.5 1.6 1.7 INTRODUCTION FUNCTION OF LIFE INSURANCE LIFE INSURANCE TYPES OF LIFE INSURANCE ROLE OF INSURANCE IMPORTANCE OF INSURANCE CONTROLING AUTHORITY

CHAPTER 2 INTRODUCTION TO INDIAN INSURANCE INDUSTRY 2.1 2.2 2.3 2.4 2.5 2.6 INDIAN INSURANCE INDUSTRY A BRIEF HISTORY OF INSURANCE SECTOR MILESTONES IN THE INSURANCE SECTOR LIST OF INSURANCE COMPANIES WORKS IN INDIA HOW BIG IS THE INSURANCE MARKET? INDIAN SCENERIO

CHAPTER 3 INTRODUCTION OF TATA AIG 3.1 3.2 3.3 3.4 3.5 TATA GROUP TATA GROUP IN INSURANCE AIG THE JOINT VENTURE- TATA-AIG HOW COMPANY WORKS

CHAPTER 4 LEARNINGS FROM THE PROJECT BIBLIOGRAPHY . ANEXXURE . Chapter No. 01

1.1. Abstract Today every sector is very competitive sector and I find that insurance sector has the maximum growth and potential as compared to other sectors. Insurance has the maximum growth rate of 15-20% while as other sector has maximum 12-15% of growth rate. This growth potential
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attracts to enter in this sector and Reliance Life Insurance has given me the opportunity to work and get experience in highly competitive and enhancing sector. This project studies the existing management practices in the channel development process and various benefits derived by them in Reliance Life Insurance .The project is all about comparative analysis of different insurance products of different companies. The objective of the project was to check the awareness level of Insurance and attitude of the people towards insurance in the current market. Survey was also done regarding the preference of insurance sector depending on the age group (whether they prefer private players or public companies) . In the beginning, we gain an insight about the company and its values and inherit them in our life, and then studied different types of insurance plans like ULIPs, term plan, endowment plan, and various other plans. Now, on to the statistical part, we designed a questionnaire that will provide a base for studying the awareness level and perception of the life insurance. The project helped me in developing my communication skill and interpersonal skills. During the tenure of my internship I learned a lot from my seniors, clique etc but above all I learned a lot from my own personal experience. 1.2. INTRODUCTION 1.2.1. INSURANCE INDUSTRY The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more risky for coverage. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to the Triton (Total) Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies .Insurance regulatation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over Insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon. The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State lead planning and development. The (non-life) insurance business continued to thrive with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance Industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies- National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company (GIC).The general insurance business was nationalized after the promulgation of General Insurance Business (Nationalizations) Act, 1972.The post-nationalization general insurance business was undertaken by the Genera. 1.2.2. About the project
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The project deals with Survey of 50 prospective customers & 50 existing customer write Reliance Life Insurance & TATA AIG offered by Insurance companies. 1.2.3. Purpose of the project The main purpose of the project is to do Survey of 50 prospective customers & 50 existing customer write Reliance Life Insurance & TATA AIG. The project would also help in understanding preference of people regarding private and public insurance companies. The main objective of the research is:i) Reliance life insurance with Tata AIG life insurance. finding out the features and benefits of these plans to find out the awareness level of insurance in Delhi. to determine customer preference towards private insurance. marketing of different insurance products. 1.2.4. Scope of the project The entry of foreign MNCs and the conductive business environment fostered by the government, it is no wonder that the re-entry of private insurance has marked a second coming for the sector. In just five years, the sector has undergone a makeover, offering more choice, better services, quicker settlement, tighter regulation and greater awareness s the environment become more and more competitive and services and products become alike, creating a differentiation is becoming extremely tough. Thus, the main objective of my project was to find out the preference of people regarding insurance companies, which would help R.L.I. employees to market their product. The study then goes on to evaluate and analyze the findings so as to present a clear picture of recent trends in the Insurance sector. Chapter No. 2 2. REVIEW OF LITERATURE 2.1. About Insurance Industry "Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected. For Example, in a Life Policy, by paying a premium to the Insurer, the family of the insured person receives a fixed compensation on the death of the insured. Similarly, in a car insurance, in the event of the car meeting with an accident, the insured receives the compensation to the extent of damage. It is a system by which the losses suffered by a few are spread over many, exposed to similar risks. 2.2. Logic of insurance It is a system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected
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event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the amount premiums collected from the insuring public and the Insurance Companies act as trustees to the collected. 2.3. Need of insurance 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. By taking life insurance a person can have peace of mind and need not worry about the financial consequences in case of any untimely death. Certain Insurance contracts are also made compulsory by legislation. For example, Motor Vehicles Act 1988, stipulates that a person driving a vehicle in a public place should hold a valid insurance policy covering Act" risks. Another example of compulsory insurance pertains the Environmental Protection Act, wherein a person using or to carrying hazardous substances (as defined in the Act) must hold a valid public liability (Act) policy. 2.4 Insurance in India Insurance is a federal subject in India and has a history dating back to 1818. Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the country's GDP while general insurance premiums to 0.65% of India's GDP. The Insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global insurance company wanting to have a lion's share. Currently, the largest life insurance company in India is still owned by the government. 2.5. History of Insurance in India In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign
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insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Association of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices. In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973. This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector. The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 where in , among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests. In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill delinking the four subsidiaries from GIC in July, 2002. Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country. The insurance sector is a colossal one and is
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growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the countrys GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country. 2.6. Life Insurance Corporation Act, 1956 Even though the first legislation was enacted in 1938, it was only in 19 January 1956, that life insurance in India was completely nationalized, through a Government ordinance; the Life Insurance Corporation Act, 1956 effective from 1.9.1956 was enacted in the same year to, interalia, form LIFE INSURANCE CORPORATION after nationalization of the 245 companies into one entity. There were 245 insurance companies of both Indian and foreign origin in 1956. Nationalization was accomplished by the govt. acquisition of the management of the companies. The Life Insurance Corporation of India was created on 1 September, 1956, as a result and has grown to be the largest insurance company in India as of 2006 . 2.7. General Insurance Business (Nationalization) Act, 1972 The General Insurance Business (Nationalization) Act, 1972 was enacted to nationalize the 100 odd general insurance companies and subsequently merging them into four companies. All the companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance, and United India Insurance which were headquartered in each of the four metropolitan cities. Chapter No. 3 3.1. Insurance Regulatory and Development Authority (IRDA) Act, 1999 Till 1999, there were not any private insurance companies in Indian insurance sector. The Govt. of India then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies into the insurance. Further, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies. In recent years many private players entered in the Insurance sector of India. Companies with equal strength started competing in the Indian insurance market. Currently, in India only 2 million people (0.2 % of total population of 1 billion), are covered under Media claim, whereas in developed nations like USA about 75 % of the total population are covered under some insurance scheme. With more and more private players in the sector this scenario may change at a rapid pace

Chapter No. 4 4.1. Different Insurance Companies Insurance is an upcoming sector, in India the year 2000 was a landmark year for life insurance industry, in this year the life insurance industry was liberalized after more than fifty years. Insurance sector was once a monopoly, with LIC as the only company, a public sector
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enterprise. But nowadays the market opened up and there are many private players competing in the market. There are fifteen private life insurance companies has entered the industry. After the entry of these private players, the market share of LIC has been considerably reduced. In the last five years the private players is able to expand the market (growing at 30% per annum) and also has improved their market share to 18%.For the past five years private players have launched many innovations in the industry in terms of products, market channels and advertisement of products, agent training and customer services etc. The various life insurers entered India:1. Bajaj Allianz Life Insurance Company Limited 2. Birla Sun Life Insurance Co. Ltd 3. HDFC Standard Life Insurance Co. Ltd 4. ICICI Prudential Life Insurance Co. Ltd. 5. ING Vysya Life Insurance Company Ltd. 6. Life Insurance Corporation of India 7. Max New York Life Insurance Co. Ltd 8. Met Life India Insurance Company Ltd. 9. Kotak Mahindra Old Mutual Life Insurance Limited 10. SBI Life Insurance Co. Ltd 11. Tata AIG Life Insurance Company Limited 12. Reliance Life Insurance Company Limited. 13. Aviva Life Insurance Co. India Pvt. Ltd. 14. Sahara India Life Insurance Co, Ltd. 15. Shriram Life Insurance Co, Ltd. 16. Bharti AXA Life Insurance Company Ltd. 17. Future Generali Life Insurance Company Ltd. 18. IDBI Fortis Life Insurance Company Ltd. 19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd 20. AEGON Religare Life Insurance Company Limited. 21. DLF Pramerica Life Insurance Co. Ltd. 22. Star Union Dai-ichi Life Insurance Comp. Ltd. 23.India First Life Insurance Company Ltd. The various other general Insurance Companies are as under:1. National Insurance Company Limited. 2. Reliance General Insurance. 3. Star Health Plus Insurance. 4. Oriental Insurance Company. 5. United India Insurance Company Ltd. 6. Bajaj Allianz General Insurance Company Ltd. 7. Future General Insurance Company Ltd. 8. ICICI Lombard General Insurance Ltd.

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4.2. Market Share of Indian Insurance Companies

_ S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Company L.I.C. ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Birla sun life Reliance life insurance Max Newyork Om kotak AVIVA TATA AIG MetLife ING Vysya Shriram Life Market share 48.10% 13.70% 10.30% 6.20% 4.10% 3.40% 3.40% 2.40% 1.90% 1.80% 1.50% 1.40% 1.20% 0.30%

4.3. BOOMING INSURANCE MARKET With a huge population base and large untapped market, insurance industry is a big opportunity area in India for national as well as foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new players significantly enhancing product awareness and promoting consumer education and information. The strong growth potential of the country has also made international players to look at the Indian insurance market. Moreover, saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players. This research report will help the client to analyze the leading-edge opportunities critical to the success of insurance industry in India. Based on this analysis, the report gives a future forecast of the market that is intended as a rough guide to the direction in which the market is likely to
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move. Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by 201112.

Total non-life insurance premium is expected to increase at a CAGR of 25% for the period spanning from 2008-09 to 2011-12. With the entry of several low-cost airlines, along with fleet expansion by existing ones and increasing corporate aircraft ownership, the Indian aviation insurance market is all set to boom in a big way in coming years. Home insurance segment is set to achieve a 100% growth as financial institutions have made home insurance obligatory for housing loan approvals

A booming life insurance market has propelled the Indian life insurance agents into the top 10 country list in terms of membership to the Million Dollar Round Table (MDRT) an exclusive club for the highest performing life insurance agent. Chapter No. 5 5.1 ADVANTAGES OF LIFE INSURANCE 5.1.1 Protection against risk of untimely death Life insurance is a product, which offers protection against the risk of death. The full sum assured is made available under a life assurance policy, whereas under other savings schemes, the total accumulated savings alone will be available. 5.1.2. Educational requirements and charity The object of insurance may be to serve as a security to educational funds in respect of loans advanced for educational purpose or to provide donations to charitable institutions like hospital and school. 5.2.3. Nomination and assignment The life insured can name the person or persons to whom the policy money would be payable in the event of his death .the proceeds of a life insurance policy can be protected against the claims of the creditors of the life insured by effecting a valid assignment of the policy. The beneficiaries are fully protected from creditors expect to the extent of any interest in the policy retained by the insured.21Marketability and suitability for borrowing After 3 years, if the policyholder finds that he is unable to continue payment of premiums he can surrender a policy for a cash sum. A life insurance policy is accepted as a security for a commercial loan.

5.2.4. Loans from the insurance company A policy holder can take a loan from his insurance company against the Security Of his life insurance policy provided the terms of the terms of his policy allow such a loan. This loan can

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be taken usually after a period of 3 years from Commencement of the policy and is a percentage of its surrender value. 5.2.5 Investment options The unit link products gives comprehensive insurance solutions that cater to an Individuals dual need of earning potentially high returns as well as stay for life. Thus there is an option to invest money in the products that combine the best Of insurance and investment. In a volatile market conditions it is possible to secure both as one can hedge the investment with saver investment vehicles that provide a diversified portfolio. 5.2.6 . Tax benefits The Indian income tax act provides tax concessions to the policyholder both on payment of premium and on the maturity amount. Under sec 88 the tax benefits on premium paid by an individual for life insurance policies on his own life\on the life of spouse \children minor or major, including married daughters. Under sec 6 of the married womens property act if a married man takes a policy of life insurance on his own life and expenses on the face of it to be for the benefit of his wife or of his wife and children or any of them, then it shall be deemed to be a trust for the benefit of his wife and children or any of them, According to the interest so expressed and shall not so long as any object of trust remains be subject to the control of the husband or to his creditors or form part of his estate. An insurance policy taken by a married man in the above manner is ideal way to protect the interest of his wife and children, even after his untimely death. Chapter No. 6 6.1 Types of insurance products 6.1.1. Term assurance planIn insurance language this is a pure risk cover and can be described as an insurance or risk management product in its purest and simplest form. In case of your untimely death, your dependents will receive the risk-cover amount or the sum assured. On the other hand, there is no survival benefits if you survive the policy term, and you also do not get back the premiums paid. 6.1.2. Endowment assurance plansIt is a traditional investment-cum-insurance plan. In other words, it provides both life cover (in the event of death of life insured) or maturity benefits if he/she survives the policy term. Endowment plans are typically front-loaded. Therefore it makes sense for you to remain in the policy for at least 12-15 years.

6.1.3. Money-back policy-

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It is a variant of the endowment assurance policy-the difference is that you get the survival benefits intermittently over the life of the policy. Thus taking care of his lump-sum monetary requirements to enable him to meet his financial goals and major commitments. The maturity benefit is the sum assured value less the survival benefits already paid underthe policy, plus bonuses accrued, if any. In case of untimely death the nominee will receive the entire sum assured without considering the payouts already made to you before the unfortunate death. 6.1.4. Whole life planThis policy provides the life assurance cover for almost the entire life. Most of the insurance companies provide protection up to the age of 100 years. The sum assured is paid to you once you reach this age, and the policy is terminated. In this payment of premium is for whole life, and the sum assured is paid to your nominee in the event of your death. In other words, this is equivalent to a term plan over your lifetime. 6.1.5. Pension planA pension plan can be looked as more of an investment product offered by insurers to cater to the golden retirement years of an individual. Also referred to as retirement plans, these are designed to ensure that you are financially independent during your retirement years. Most of the pension plans also provide an optional life assurance cover in them. 6.1.6. Child planIt basically aims at ensuring the achievement of life goals of your child. The goal can be higher education, financial help in establishing a business or profession, or even marriage. In a child plan, the life assured can be the parent or the child. The beneficiary for the policy, however, is the child. As a child is a minor, the life insurance contract is between the parent and the insurance company. In case of early death of the parent, the premium payment is waived off by the insurance company and the policy continues as originally planned. 6.1.7. Unit Linked Insurance PlanULIPs have been the darling of insurance companies, intermediaries and the insured population alike over the last five years. The main reason for this popularity is the twin advantage of a pure life cover (insurance component) and a range of investment funds or options (savings component) to match your risk profile. While the pure life cover provides the much needed financial security to your dependents in the event of your untimely death, the savings component allows you to participate in the capital markets and build wealth over the long-term tenure of the policy. 7.1. Marketing Mix in Insurance Industry (7 P's) 7.1.1. INTRODUCTION: Wherever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. The risks may be certain events like death, pension, retirement or uncertain events like theft, fire, accident, etc. Insurance is a financial service for collecting the savings of the public and providing them with risk coverage. The main function of Insurance is to provide protection against the possible chances of generating losses. It eliminates worries
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and miseries of losses by destruction of property and death. It also provides capital to the society as the funds accumulated are invested in productive heads. Insurance comes under the service sector and while marketing this service, due care is to be taken in quality product and customer satisfaction. While marketing the services, it is also pertinent that they think about the innovative promotional measures. It is not sufficient that you perform well but it is also important that you let others know about the quality of your positive contributions. The creativity in the promotional measures is the need of the hour. The advertisement, public relations, word of mouth communication needs due care and personal selling requires intensive care. 7.1.2. INSURANCE MARKETING: The term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organization survives and thrives in the right perspective. 7.1.3. MARKETING MIX FOR INSURANCE COMPANIES: The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market. The Insurance business deals in selling services and therefore due weightage in the formation of marketing mix for the Insurance business is needed. The marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the product, its price, place, promotion, people, process & physical attraction. The above mentioned 7 Ps can be used for Marketing of Insurance products, in the following manner: 7.1.3.1. PRODUCT: A product means what we produce. If we produce goods, it means tangible product and when we produce or generate services, it means intangible service product. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product. In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are the two leading companies offering insurance services to the users. Apart from offering life insurance policies, they also offer underwriting and consulting services. When a person or an organization buys an Insurance policy from the insurance company, he not only buys a policy, but along with it the assistance and advice of the agent, the prestige of the insurance company and the facilities of claims and compensation. It is natural that the users expect a reasonable return for their investment and the insurance companies want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the services or the schemes should be motivational. The Group Insurance scheme is required to be promoted, the Crop Insurance is required to be expanded and the new schemes and policies for the villagers or the rural population are to be included. The Life Insurance Corporation has intensified efforts to promote urban savings, but as far as rural savings are concerned, it is not that impressive. The introduction of Rural Career Agents Scheme has been found instrumental in inducing the rural prospects but the process is at infant stage requires more professional excellence. The policy makers are required to activate the efforts. It would be prudent that the LIC is allowed to pursue a policy of direct investment for rural development. Investment in Government securities should be stopped and the investment should be channelized in private sector for maximizing profits. In short, the formulation of product-mix should be in the face of innovative product strategy.
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7.1.3.2. PRICING: In the insurance business the pricing decisions are concerned with: i) The premium charged against the policies, ii) Interest charged for defaulting the payment of premium and credit facility, and iii) Commission charged for underwriting and consultancy activities. With a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. In a developing country like India where the disposable income in the hands of prospects is low, the pricing decision also governs the transformation of potential policyholders into actual policyholders. The strategies may be high or low pricing keeping in view the level or standard of customers or the policyholders. The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. The premium rates are revised if there are any significant changes in any of these factors. Mortality(deaths in a particular area): When deciding upon the pricing strategy the average rate of mortality is one of the main considerations. In a country like South Africa the threat to life is very important as it is played by host of diseases. Expenses: The cost of processing, commission to agents, reinsurance companies as well as registration are all incorporated into the cost of instalments and premium sum and forms the integral part of the pricing strategy. Interest: The rate of interest is one of the major factors which determine peoples willingness to invest in insurance. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums. 7.1.3.3. PLACE: This component of the marketing mix is related to two important facets i) Managing the insurance personnel, and ii) Locating a branch. The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the endures in such a way that a gap between the services- promised and services offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has been instrumental in making worse the image problem. The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link, lack professionalism. The front-line staff and the branch managers also are found not assigning due weight age to the degeneration process. The insurance personnel if not managed properly would make all efforts insensitive. Even if the policy makers make provision for the quality up
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gradation, the promised services hardly reach to the end users. It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or users. They are required to be given adequate incentives to show their excellence. While recruiting agents, the branch managers need to prefer local persons and provide them training and conduct seminars. In addition to the agents, the front-line staff also needs an intensive training programme to focus mainly on behavioural management. Another important dimension to the Place Mix is related to the location of the insurance branches. While locating branches, the branch manager needs to consider a number of factors, such as smooth accessibility, availability of infrastructural facilities and the management of branch offices and premises. In addition it is also significant to provide safety measures and also factors like office furnishing, civic amenities and facilities, parking facilities and interior office decoration should be given proper attention. Thus the place management of insurance branch offices needs a new vision, distinct approach and an innovative style. This is essential to make the work place conducive, attractive and proactive for the generation of efficiency among employees. The branch managers need professional excellence to make place decisions productive. 7.1.3.4. PROMOTION: The insurance services depend on effective promotional measures. In a country like India, theatre of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents play an important role. Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying. Advertising and Publicity, organisation of conferences and seminars, incentive to policyholders are impersonal communication. Arranging Kittens, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders. 7.1.3.5. PEOPLE: Understanding the customer better allows to design appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. Training, development and strong relationships with intermediaries are the key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the staff and agent level, is one of the important areas to look into. _ 7.1.3.6. PROCESS: The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Instalment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments.

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_7.1.3.7. PHYSICAL DISTRIBUTION: Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers have a large reach and presence in India. Building a distribution network is very expensive and time consuming. If the insurers are willing to take advantage of Indias large population and reach a profitable mass of customers, then new distribution avenues and alliances will be necessary. Initially insurance was looked upon as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability. As the awareness increases, the product becomes simpler and they become off-the-shelf commodity products. Today, various intermediaries, not necessarily insurance companies, are selling insurance. For example, in UK, retailer like Marks & Spencer sells insurance products. The financial services industries have successfully used remote distribution channels such as telephone or internet so as to reach more customers, avoid intermediaries, bring down overheads and increase profitability. A good example is UK insurer Direct Line. It relied on telephone sales and low pricing. Today, it is one of the largest motor insurance operators. Technology will not replace a distribution network though it will offer advantages like better customer service. Finance companies and banks can emerge as an attractive distribution channel for insurance in India. In Netherlands, financial services firms provide an entire range of products including bank accounts, motor, home and life insurance and pensions. In France, half of the life insurance sales are made through banks. In India also, banks hope to maximize expensive existing networks by selling a range of products. It is anticipated that rather than formal ownership arrangements, a loose network of alliance between insurers and banks will emerge, popularly known as bancassurance. Another innovative distribution channel that could be used are the non-financial organizations. For an example, insurance for consumer items like fridge and TV can be offered at the point of sale. This increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods will be possible and insurance can be one of the various incentives offered. Chapter No. 8 8.1 Customer for Reliance Life Insurance Life insurance is one of the best known insurance products today. People buy these products as investment tools and also as protection for themselves and their families. All the insurance companies the world over are looking at attracting the eye balls of customer and positioning their solutions innovatively to cater to niche and specific markets. One of the most critical aspects both from the view point of the customer and the insurer is getting important and relevant leads that can be beneficial for both. There is a big need for market intelligence, database of products and services and secondary data that can be converted in to leads for the companies to tap. The customer also needs to have relevant life insurance lead information on products that give him the best value for his money. The Internet is the best repository for all relevant information both for the potential customers as well as the insurance companies. The insurance companies can put up all kinds of data and information on their websites that a potential customer can conveniently use to arrive at a decision. On the other end of the spectrum, a customer can use relevant keywords to search for information on the Internet to get hold of a good insurance product. So, the key lies to getting Search Engine Optimization done by the insurance companies so that every time an insurance specific keyword is used to search the Internet, their website is one of the first to be displayed. This assures a large internet traffic that can help generate potential leads from the information and digital footprints left by the visitors and can be later converted to paying customers. Various B2B and B2C portals offer
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a host of innovative services that can be used as leads by the insurance companies and also the potential customers who are looking for a good deal in todays insurance jungle. Nowadays, banks have entered the insurance domain and since they have a variety of customers already in their folds, they can use their readily available database as leads to contact potential customers for their insurance products. For consultants and insurance agents, it is imperative that they get associated for a symbiotic relationship with retail shops and chains via the internet as well as otherwise to gain maximum visibility and use tools such as advertisement, mailers, flyers and sales incentives to gather life insurance leads and convert them to potential customers. The customer gets the best of everything in the present scenario. All that a prospective client has to do is log on to the internet, or call a toll free number or walk into an office to get the best deal. However, it is always good to use all the resources, leads and information available to ensure that he decides on the best product available. There are many ways in which both the customer and the insurer can get access to all important life insurance lead. The trick lies in using the leads well to get the most out of a particular situation. The endeavour of a company is to position itself favourably so that the customer chooses him over other similar products while the job of the client is to use the leads in such an effective way so that there is no reason for him to repent later that he could have opted for a better deal. Chapter No 9 9.1 Changing face of Indian insurance industry Indian life-insurance market is the target market of all the companies who either want to extend or diversify their business. To tap the Indian market there has been tie-ups between the major Indian companies with other International insurance companies to start up their business. The government of India has set up rules that no foreign insurance company can setup their business individually here and they have to tie up with an Indian company and this foreign insurance company can have an investment of only 24% of the total start-up investment. Indian insurance industry can be featured by:

Low market penetration Ever growing middle class component in population. Growth of customers interest with an increasing demand for better insurance products. Application of information technology for business. Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. 9.1.1. India: The Next Insurance Giant Market Performance & Forecast: In 2000, Indian insurance market size was $21.71 billion. Between 2000 and 2012, it had an increase of 120% and reached $47.89 billion. Between 2000 and 2012, total premiums maintained an average growth rate of 11.96% and the CAGR growth during this time frame has been 11.96%. It was one of the most consistent

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growth patterns we have noticed in any other emerging economies in Asian as well as Global markets. Indian Insurance Market Indian economy is the 12th largest in the world, with a GDP of $1.25 trillion and 3rd largest in terms of purchasing power parity. With factors like a stable 8-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a rapidly expanding FDI inflows, it is on the fulcrum of an ever increasing growth curve. Insurance is one major sector which has been on a continuous growth curve since the revival of Indian economy. Taking into account the huge population and growing per capita income besides several other driving factors, a huge opportunity is in store for the insurance companies in India. According to the latest research findings, nearly 80% of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subjected to weak social security and pension systems with hardly any old age income security. As per our findings, insurance in India is primarily used as a means to improve personal finances and for income tax planning; Indians have a tendency to invest in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small 4-5%. This in itself is an indicator that growth potential for the insurance sector is immense. Its a business growing at the rate of 15-20% per annum and presently is of the order of $47.9 billion. India is a vast market for life insurance that is directly proportional to the growth in premiums and an increase in life density. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant. Competition in this market is increasing with companys continuous effort to lure the customers with new product offerings. However, the market share of private insurance companies remains very low -- in the 10-15% range. Even to this day, Life Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of government still dominates the market, with price controls, limits on ownership, and other restraints. Major Driving Factors

Growing demand from semi-urban population Entry of private players following the deregulation Rising demand for retirement provision in the ageing population The opening of the pension sector and the establishment of the new pension regulator Rising per capita incomes among the strong middle class, and spreading affluence Growing consumer class and increase in spending & saving capacity Public private partnerships infrastructure development Dearth of innovative & buyer-friendly insurance products

Emerging Areas Healthcare Insurance & Pension Plans Mutual fund linked insurance products Multiple Distribution Networks .i.e. Bank assurance

The upward growth trend started from 2000 was mainly due to economic policies adopted by the then Indian government. This year saw initiation of an era of economic liberalization and globalization in the Indian economy followed by several reforms and long-term policies that created a perfect roadmap for the success of Indian financial markets. On the basis of several
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macroeconomic factors like increase in literacy rate & per capita income, decrease in death rate and unemployment, better tax rebates, growing GDP etc., we estimate that the Indian insurance sector will grow by $28.65 billion and reach $76.54 billion by 2011 with a CAGR (compounded annual growth rate) of 12.44% and a growth of 59.82%. Chapter No. 10 1.1.Valuing the invaluable Both under insurance and over insurance can often be attributed to the lack of proper understanding of the exact insurance needs for oneself and the family, and the failure to spot and cover all liabilities properly and adequately, or being over-conservative in this regard. 1.1.1. Under Insurance Under insurance, typically occurs when the existing financial liabilities and insurance needs are fully taken care of. In the event of the untimely death of the only (or the main earning) member of the family, his financial liabilities would obviously fall on his dependents, leaving them in a state of financial distress that could threaten their need of sustenance. 1.1.2. Cover Insurance Conversely, there are also instances where individuals indulge in life insurance covers that far exceed in value than what is actually required. This is a classic case of over insurance, which leads to an unnecessarily higher premium payment, leaving you much poorer. It results in unnecessary expenditure that could otherwise be wisely invested Elsewhere. The need for an adequate insurance cover is never static and keeps on varying with changes in the life stages and important events of an individual. The table below provides an insight into the various life stages and events when life insurance cover usually requires a revision. Busting some insurance myths With a range of products flooding the market, people today are more confused about insurance than ever. Here are a bagful of myths floating around and I have made an effort to bust a few of the significant ones. 1. I dont want to put my hard-earned money into a pure term assurance plan if I dont even get back all the premiums paid on survival of the term. A pure term assurance plan is a risk mitigation tool and not an investment product. In the event of your untimely death during the policy term, your dependents get a sum assured to enable them to continue living their existing lifestyle, repay loan liabilities and meet longterm financial goals. To achieve this, you only need to pay a premium amount that is a fraction of the sum assured. Moreover unlike investments, where it takes years to build a suitable corpus, the sum assured on your insurance policy is payable, in the event of your untimely death, from the date of its commencement. 2. It would be enough if only the main breadwinner of the family takes life insurance. While the main breadwinner should take out a life insurance policy on a priority basis; the other members of the family should also be covered. If the wife is working, then she should be covered to the extent of loss of income to the family in the event of her untimely death. On the

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other hand, even if she is not working, she should be covered, albeit for a smallersum, because her contribution to the family, in form of household services, has monetary value. 3. I will get back all my premiums when I surrender my endowment policy prematurely. You couldnt be more wrong! You only get back the surrender value, which is based on the paid-up value is a proportion of the original sum assured based on the number of years for which premium was paid against the total premium-paying years. The paid-up value of the policy is also calculated and available as per the policy conditions. 4. Insurance is primarily useful as a tax-saving instrument. Again, this is a huge misconception! While you do get attractive tax breaks, the primary objective of insurance is risk mitigations followed by wealth creation for the long term. Many people end up taking this myth too seriously, particularly without considering the costs and benefits involved. 5. After three years, I can walk away from any ULIP, along with the accrued Investment or the fund value. Sure, you can do that! However, you need to remember that a ULIP, at least in the initial years, is very different from a mutual fund. While a mutual fund only charges o nominal fund management charge every year, a ULIP is front loaded. That means a significant chunk of your premium is allocated across various charges in the initial years of the policy and only the balance gets invested in a fund of your choice. As these charges taper off and average over time, it makes sense to stay in a ULIP for at least 15 years. Therefore, if your investment horizon is just 3-5 years, you better off in a mutual fund, and you can take out a separate term assurance plan for the required risk cover. Chapter No. 11 11.1. PROFILE OF ORGANIGATION RELIANCE LIFE INSURANCE FOUNDER Few men in history have made as dramatic a contribution to their countrys economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless. As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of Indias capital markets, the champion of shareholder interest. But the role Dhirubhai cherished most was perhaps that of Indias greatest wealth Creator. In one lifetime, he built, starting from the proverbial scratch, Indias largest private sector enterprise. When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crore colossusan achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so. Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks. Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian markets.

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Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become Indias largest private sector enterprise. Through out this amazing journey, Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the worlds largest shareholder families. 11.1.1. About Reliance Life Insurance Industry Reliance Life Insurance offers you products that fulfil your savings and protection needs. Our aim is to emerge as a transnational Life Insurer of global scale and standard. Reliance Life Insurance is a Reliance Capital Company and is part of Reliance Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms 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 Group also has presence in Communications, Energy, Natural Resources, Media, Entertainment, Healthcare and Infrastructure. Nippon Life Insurance Company acquired 26% interest in equity share capital of the Company effective October 7, 2011 subsequent to receipt of all regulatory approval. Nippon Life Insurance, also called Nissan, is Japan's largest private life insurer with revenues of Rs 346,834 crore (US$ 80 Billion) and profits of over Rs 12,199 crore (US$ 3 billion). The Company has over 14 million policies in Japan, offers a wide range of products, including individual and group life and annuity policies through various distribution channels and mainly uses face-to-face sales channel for its traditional insurance products. The company primarily operated in Japan , North America, Europe and Asia and is headquartered in Osaka, Japan. It is ranked 81st in Global Fortune 500 firms in 2011. 11.1.2. CORPORATE OBJECTIVE At R.L.I. we strongly believe that as is different at every stage, insurance must offer flexibility and choice to go with that stage. We are fully prepared and committed to guide you on insurance products and services through our well-trained advisors, backed by competent marketing and customer services, in the best possible way. It is our aim to become one of the top private insurance companies in India and to become a cornerstone of RLI integrated financial services business in India.

11.1.3. CORPORATE MISSION To set the standard in helping our customers manage their financial future. BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY R.L.I. INSURANCE PLANS AVAILABLE 1. Products (Individual Plans) Savings (Endowment) 2. Reliance Endowment Plan (formerly Divya Shree) 3. Reliance Special Endowment Plan (formerly Subha Shree)
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4. Reliance Cash Flow Plan (formerly Dhana Shree) 5. Reliance Child Plan (formerly Yuva Shree) 6. Reliance Whole Plan (formerly Nithya Shree) Pensions 7. Reliance Golden Years Plan (formerly Bhagya Shree) Investments 8. Reliance Market Return Plan (formerly Kanaka Shree) 9. Risk / Protection 10. Reliance Term Plan (formerly Raksha Shree) Products (Group / Corporate Plans) Tax Benefits It is one kind on benefit from life insurance policy . Maximum people buy insurance because they want deduction in their income tax. Premiums paid for Life insurance - Deduction under Section 80C 1. Category of assesses allowed deduction: Individual assesses and Hindu Undivided Family assesses. 2. Eligible Savings: Premiums paid or deposited by assesses to effect or to keep in Force insurance on the life of following persons: In case of individual assesses Himself/Herself, spouse, children of such Individual In case of HUF assesses any member3. 20% limit: If the amount of premium paid in a financial year for a policy is in excess of 20% of the actual capital sum assured, then deduction will be allowed only for premiums up to 20% of the sum assured. 4. Limit on amount of deduction: Deduction will be restricted to investments up to Rs 100,000 in savings specified under Section 80C (including life insurance premiums). The limit of deduction under Section 80C will be part of the overall limit prescribed under Section 80CCE. 5. Disallowance: This benefit will be reversed if the policy is terminated/cease to be in force within 2 years after the date of commencement of policy. Premiums paid for Pension plans - Section 80CCC 1. Permitted Deduction: Section 80CCC allows for deduction of premiums paid under a pension scheme. As per this Section, the whole of amount paid or deposited (excluding interest or bonus accrued or credited to the assessees account, if any) as does not exceed the amount of Rs 100,000 is eligible for deduction from the total income. 2. Receipt under Policy: Amounts received on surrender (whole/part) of annuity plan, amounts received as Pension is taxed as income. 3. Limit: The limit of deduction under Section 80CCC will be part of the overall limit prescribed under Section 80CCE.

Overall deduction limit - Section 80CCE As per this section, the maximum amount of deduction that an assesses can claim under Sections 80C, 80CCC and 80CCD will be limited to Rs 100,000. Premiums paid for medical insurance - Section 80D 1. Category of assesses allowed deduction: Individual assesses and Hindu
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Undivided Family assesses. 2. Eligible premiums: Premiums paid by assesses by any mode other than cash out of his taxable income to effect or to keep in force insurance on the health of following persons: In case of individual assesses Himself/Herself, spouse, dependent children and parent or parents. The condition of dependency of parent has been removed from FY 2008-09. In other words, even if the parent is independent, the individual can pay the premium and claim the deduction. In case of HUF assesses any member of HUF 3. Deduction and upper limit: The qualifying amounts under Section 80D for self, spouse and dependent children is up to Rs. 15,000/- and additional deduction upto Rs. 15,000/- for the parents. However, a higher amount of up to Rs 20,000/- is permitted if the person, for whose health insurance the premium was paid, was aged 65 years or more at any time during the financial year in which the premium was paid. Such amounts of premium paid would be allowed as deduction from the total income of the assesses. Benefits under insurance policy - Section 10(10D) As per Section 10(10D) of Income tax Act, 1961, any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy is exempt from tax. However, this rule does not apply to following amounts: sum received under Section 80DD(3), or any sum received under a Key man Insurance Policy, or any sum received other than as death benefit under an insurance policy which has been issued on or after April 1 2003 and if the premium paid in any of the years during the term of the policy is more than 20% of the sum assured. Tax Rates for Individuals The rates of income-tax for FY 2010-11 Surcharge on Income Tax: No surcharge on Income Tax for the Financial Year 2009-10 for Individuals. Education Cess on Income Tax Education Cess @3% will be payable on the amount of income tax (including surcharge). Individual Female Senior citizen Rate (except female/ senior citizen) (Below 65years) (Above 65 years) 0 160,000 0 190000 0 240000 Rs. 160,001 to Rs. 190,001 to Rs. 240,001 to 10% Rs. 500,000 Rs.500,000. Rs.500,000 Rs. 500,001 to Rs. 500,001 to Rs. 500,001 to Rs.800,000 Rs.800,000 Rs.800,000 > Rs. 800,000 > Rs. 800,000 > Rs. 800,000 Secondary & Higher Education Cess on Income Tax Additional Education Cess @1% will be payable on the amount of Income tax (Including surcharge). Chapter No. 12

Nil 20% 30%

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12.1 OTHERS PLAYERS 12.1.1. Birla Sun Life Insurance Birla sun life Insurance Company limited is a joint venture between the Aditya Birla group, one of the largest business houses in India and Sun Life Financial Inc., as leading international financial services organization. The local knowledge of the Aditya Birla group combined with the expertise of Sun Life Financial Inc., offer a formidable protection for your future. The Aditya Birla group has a turnover of Rs. 1,33,875 corers (as on 31st march 2008). It has over 100,000 employees across all its units worldwide. It is led by its chairman Mr. Kumar Mangalam Birla. Some of its key companies are Hidalgo, Grasim and Aditya Birla Novo. Sun Life Financial Inc. and its partners, have operations in key markets worldwide. These include Canada, U.S, U.K, Hong Kong, the Philippines, Japan, Indonesia, India, china and Bermuda. Sun Life Financial Inc. has assets under management of over us$ 404.7 BILLION (as on 31st March, 2008). It is a leading performer in the life insurance market in Canada. Birla sun life insurance (BSLI) has been operating for 7 years. It has contributed significantly to the growth and development of the life insurance industry in India. It pioneered the launch of unit linked life insurance plans amongst the private player in India. It pioneered the launch of united linked life insurance plans amongst the private players in India. It was the first player in industry to sell its policies through the Bancassurance route and through the internet. It was the first private sector player to introduce a pure term plan in the Indian market. BSLI has covered more than 2 million lives since it commenced operations. 12.1.2. Life Insurance Corporation Of India Mission Create unmatched value for everyone through dependable, effective, transparent and profitable life insurance and pension plans. Vision Empowering everyone live their dreams. 12.1.3. National Insurance Company Limited National Insurance Company Limited was incorporated in 1906 with its registered office in Kolkata. Consequent to passing of the General Insurance Business Nationalization Act in 1972, 21 Foreign and 11 Indian Companies were amalgamated with it and National became a subsidiary of General Insurance Corporation of India (GIC) which is fully owned by the Government of India. After the notification of the General Insurance Business (Nationalisation) Amendment Act, on 7th August 2002, National has been de-linked from its holding company GIC and presently operating as a Government of India undertaking. National Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India, carrying out non life insurance business. Headquartered in Kolkata, NIC's network of about 1000 offices, manned by more than 16,000 skilled personnel, is spread over the length and breadth of the country covering remote rural areas, townships and metropolitan cities. NIC's foreign operations are carried out from its branch offices in Nepal. National transacts general insurance business of Fire, Marine and Miscellaneous insurance. The Company offers protection against a wide range of risks to its customers. The Company is privileged to cater its services to almost every sector or industry in the Indian Economy viz. Banking, Telecom, Aviation, Shipping,
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Information Technology, Power, Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile, Education, Environment, Space Research etc. National Insurance is the second largest non life insurer in India having a large market presence in Northern and Eastern India. 12.1.4. Tata AIG life-A New Look at Life Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. The Tata Group holds 74 percent stake in the insurance venture with AIG holding the balance 26 percent. Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life Insurance Company was licensed t operates in India on February 12, 2001 and started operations on April 1, 2001. Tata AIG Life offers a broad array of life insurance coverage to both individuals and groups, providing various types of add-ons and options on basic life products to give consumers flexibility and choice. Chapter No. 13 13.1. RESEARCH METHODOLOGY 13.1 Sources The success of any Insurance company depends on how well they are able to align with the objectives and needs of individual customers, and is able to provide proper solutions to them. To know how a company is performing and whether they have any cutting edge advantage over competitors, an intensive study of the market is absolutely necessary. In order to understand the performance of different companies in the market, we did two types of surveys, primary survey and secondary survey. 13.1.2. Primary survey Primary survey included: Visiting websites and fixing appointments with their agents. Creation of database of prospective clients from different sources Calling them up to fix appointment and then visiting them. Prepare a questionnaire for the market survey. Meeting different people to know their views, perception and Preference of different insurance companies. 13.1.3 Secondary survey Secondary survey included of consulting books, magazines, journals, internet and Also taking reference from:- Library, Internet, R.L.I. reports 13.1.4. Methodology We would go in for a qualitative research as our objective is to judge the perception and preference of different insurance products. The research would be done from primary data. 13.1.5. Sample Design

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Target population: The target population for the research would be people who are in theage group beyond 40 and age group between 25 to 40.We targeted this group of population because these populations are the potential customers of insurance. 13.1.5.1. Sampling Frame: The research would be conducted in Varanasi. The survey has been conducted among the potential customers of R.L.I. from different sectors as Reliance deals in many sectors of business. 13.1.5.2. Sampling Technique: The sampling technique that is adopted is the simple random sampling wherein every element in the target population has an equal chance or probability of getting selected in the sample. That means every unit of the population who is more is in the above mentioned age group, have an equal chance of getting selected. 13.1.5.3 Sample Size: I did a survey among 100 people by taking two categories in consideration of 50 each; that is 1.) Age group beyond 40 2) Age group between 25 to 40 13.1.6. Data Collection: The research would be conducted from the source of primary data collection. Secondary data would help us in knowing the trends prevailing in the insurance market and would help us in analyzing and interpretation of the primary data. 13.1.7. Findings and Interpretations We have presented below the findings and analysis of the questionnaire addressed to the respondents to gauge the attitude and perception of the people towards insurance. Respondents having life Insurance The question was asked to the respondents to know how many of the respondents had a life insurance policy

15% 85%

Yes No

Figure No. 1

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From the survey it was found out that 85% of the respondents had a life insurance policy where as 15% of the respondents didnt have a life insurance policy. In which company you believe most? INSURANCE COMPANY

22% Private Company 28% public company

Most of the people want to invest his money in public insurance company and in private insurance company only 22 respondent want to invest their money. Most of the people buy insurance from LIC and there are 24 private insurance company in India. Insurance policy taken from which company The question was asked to the respondents so as to get to know from which insurance company they have bought the policy

LIC ICICI Pru Reliance Life Insurance Bajaj Life Insurance Bharti AXA life Insurance

19 12 9 6 4
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The finding which came out from the survey was that 40% of the respondents who have a life insurance cover bought life insurance from Life Insurance Corporation of India (LIC). LIC is the most preferred brand in the insurance industry because it is the onl government company which offers insurance. People prefer to buy insurance from LIC because of the security being one of the prime factors. In the figure we can also see that nowadays people mindset have changed towards insurance. From whose suggestion have the respondents taken a policy? It was asked to gain an insight from the respondents that on whose suggestion did they opt for a life insurance cover or policy.

After the survey it was found that most of the respondents took policy or life insurance cover from the suggestions of their friends or family. And only 23 respondents took policy on the recommendation of the agents. Type of plan The respondents were asked which type of plan they go in for when they take up insurance cover or policy.

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After the survey it was found that term plan was the most preferred plan. Next on the list was endowment plan. Pension plan and health plan are the least preferred by customers. Preference of insurance sector according to age group:Age group beyond 40 Most of the people want to invest his money in public insurance company and in private

insurance company only 7 to 8 respondent want to invest their money. Most of the people buy insurance from LIC and there are 24 private insurance companies in India. Age Group between 25 40

If we see the younger who doing job or business or making planning for his future then they are go with TATA AIG.
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Pie Chart

Here we see that LIC have more number of market share. People believe more in LIC because this is public sector insurance company.LIC have 60% market share in insurance industry but other like private sector insurance companies have less number of market share comparison than LIC. Rank of your insurance company

People who buy policy from TATA AIG that people give highest rank to their insurance company. Reliance have 10% share of their rank. 13.1.8. Results After the survey it was found that still major portion of customers go for public insurance companies, but with the entry of more and more private companies the scenario is changing rapidly, people with a need of more and better returns are opting for private companies, and this can be justified by the increasing market share of private companies in the Indian insurance

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sector. There are various ways in which private companies are found much more lucrative than public companies and the facts which support this statement are as follows:1. Versatility of products. 2. Efficient fund managers. 3. Better customer services. 4. More returns. 5. Regular follow up. 6. Quicker settlement 13.1.9. Suggestions and recommendation

People are aware of the life insurance. Most of them know only one company which provides life insurance i.e. LIC. So awareness campaign should be run so that people are aware of different life insurance companies in India. People should be educated about the different types of products or plans offered by the life insurance companies. Most of them dont know much of the different types of plan or products. It was felt that most of the people took life for tax savings or just to cover up their life, not as an investment avenue. Life Insurance companies need to advertise in such a manner that people start investing in life insurance like the way they invest in the stock market Now at the time of global turmoil insurance company had to hold on to the policyholders trust which might lead the company to the path of success Insurance companies should try to adopt different strategies to market their products or plan. Companies should not primarily focus on the agents for their business.

13.1.10. Conclusion Insurance is one sector that witnessed continuous growth owing to there forms in 2000. The insurance sector is likely to attain a size of Rs. 2,00,000 corer ($ 51.2 billion) in 2011-12. In life insurance, the business grew by 23.3% to Rs. 93,000 corer in 2011-12 (Source: Assoc ham). The sector alone employs close to 30 lake people (including agents and direct employees).A well-functioning insurance market plays an important role in economic development and financial stability of Developing economies such as Indias. First, it inculcates and encourages the habit of saving. Second, it provides a safety net to rural and urban Enterprise and productive individuals. The life insurance market in India is on a growth path. In spite of this, the country lags far behind the others in awareness about life insurance. The challenge is to spread awareness about life insurance and it true benefits. The industry has to convince people to park their hard earned money in long-term insurance and not just look at it as a tax saving instrument. 13.1.11. Limitations:1. Useful Financial insights are not easily available. 2. Due to time constraint sufficient research on all the investment tools is difficult. 3. The survey sample is not very large for analysis 4. Properly convincing people to invest in insurance products is challenging. 5. Due to recession there is liquidity crunch in the market. 6. There might have been tendencies among the respondents to amplify or filter their responses under the testing conditions 7. The research is confined to Varanasi and does not necessarily shows a pattern applicable to other parts of the country.
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CHAPTER 1 INTRODUCTION TO INSURANCE 1.1. INTRODUCTION:"Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. With the help of Insurance, large number of people exposed to a similar risk makes contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. Insurance is a tool by which fatalities of a small number are compensated out of funds collected from plenteous. Gradually as competition increased benefits given by industry to its customers increased by leaps and bounds. Insurance is a basic form of risk management which provides protection against possible loss to life or physical assets. Person who seeks protection against such loss is termed as insured, and company that promises to honour claim, in case such loss is actually incurred by insured, is termed as Insurer. In order to get insurance, insured is required to pay to insurance company a certain amount called premium. Premium is collected by insurance companies which acts as trustee to pool created through contributions made by persons seeking to protect themselves from common risk. Any loss to the insured in case of happening of an uncertain event is paid out of this pool. Insurance business is divided into following parts: Life Insurance Property Insurance Health Insurance Auto Insurance Travel Insurance etc.

1.2. LIFE INSURANCE:Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a premium paid undertakes to pay a fixed sum of money on The death of the insured or on the expiry of a specified period of time Whichever is earlier. In case of life insurance, the payment for life insurance policy is certain. The Event insured against is sure to happen only the time of
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its happening is not known. So life insurance is known as Life Assurance.The subject matter of insurance is life of human being. Life insurance provides risk coverage to the life of a person. On death of the person insurance offers protection against loss of income and compensate the titleholders of the policy. 1.3. TYPES OF LIFE INSURANCE: Term Insurance Policy Whole life Insurance Policy Endowment Policy Pure Endowment Policy Money Back Policy Most of the products offered by Indian life insurers are developed and structured around these "basic" policies and are usually an extension or a combination of these policies. Term Insurance Policy:- A term insurance policy is a pure risk cover for a specified period of time. What this means is that the sum assured is payable only if the policyholder dies within the policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his family is entitled to the money if he dies within that 15-year period. there is no element of savings or investment in such a policy. It is a 100 per cent risk cover. It simply means that a person pays a certain premium to protect his family against his sudden death. He forfeits the amount if he outlives the period of the policy. This explains why the Term Insurance Policy comes at the lowest cost. Whole life Insurance Policy:- As the name suggests, a Whole Life Policy is an insurance cover against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death, following which the money is handed over to his family. This policy, however, fails to fulfill the additional needs of the insured during his post-retirement years. It doesn't take into account a person's increasing needs either. While the insured buys the policy at a young age, his requirements increase over time. By the time he dies, the value of the sum assured is too low to meet his family's needs. As a result of these drawbacks, insurance firms now offer either a modified Whole Life Policy or combine in with another type of policy Endowment Policy:- Combining risk cover with financial savings, endowment policies is the most popular policies in the world of life insurance.

In an Endowment Policy, the sum assured is payable even if the insured survives the policy term. If the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured just as any other pure risk cover.

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Pure Endowment Policy:- A pure endowment policy is also a form of financial saving, whereby if the person covered remains alive beyond the tenure of the policy, he gets back the sum assured with some other investment benefits. Money Back Policy:- These policies are structured to provide sums required as anticipated expenses (marriage, education, etc) over a stipulated period of time. With inflation becoming a big issue, companies have realized that sometimes the money value of the policy is eroded. That is why with-profit policies are also being introduced to offset some of the losses incurred on account of inflation.

A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum assured is payable. In case of death, the full sum assured is payable to the insured. The premium is payable for a particular period of time..

In addition to the basic policy, insurers offer various benefits such as double endowment and marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its value. 1.4. FUNCTION & CHARACTERSTICS OF INSURANCE:Provide protection:- The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Sharing of risk:- Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Small capital to cover larger risk:- Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contribute towards the Development of country :- Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

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Means of savings and investment:- Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. 1.5. ROLE OF THE LIFE INSURANCE:Life insurance as an investment:- Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies. Life insurance as risk cover:- Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide. Life insurance as tax planning:- Insurance serves as an excellent tax saving mechanism. government gives tax relaxation on every life insurance policy. 1.6. IMPORTANCE OF THE LIFE INSURANCE:Protection against untimely death:- Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving for old age:- After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. Promotion of savings:- Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only, after the expiry of duration of the policy. Initiates investments:- Life Insurance Corporation encourages the public savings and canalizes the same in various investments for the economic development of the country. Life insurance is an important tool for the collection of small savings. Credit worthiness:- Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business.

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Social Security:- Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future. Tax Benefit:- Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C. 1.7. CONTROLING AUTHORITY:Insurance Regulatory & Development Authority is regulatory and development authority under Government of India in order to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry. It is basically a ten members' team comprising of a Chairman, five full time members and four part-time members, all appointed by Government of India. This organization came into being in 1999 after the bill of IRDA was passed in the Indian parliament. Composition of Authority:As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority. IRDA was constituted by an act of parliament. The Authority is a ten member team consisting of: (a) a Chairman (b) five whole-time members (c) four part-time members (all appointed by the Government of India) Powers and Functions of IRDA:It issues the applicants in insurance arena, a certificate of registration as well as renewal, modification, withdrawal, suspension or cancellation of such registrations. It protects the interests of the policy holders in any insurance company in the matters related to the assignment of policy, nomination by policy holders, insurable interest, and resolution of insurance claim, submission value of policy and other terms and proposals in the contract. It also specifies obligatory credentials, code of conduct and practical instructions for mediator as well as the insurance company. Apart from this, it also defines the code of conduct for the surveyors and loss assessors involved with the insurance business.

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One of the major functions of IRDA includes endorsing competence in the insurance business. Apart from this, upholding and regulating professional organizations in insurance and re-insurance business is also a major duty of IRDA. IRDA is also entitled to for asking information, undertaking inspection and investigating the audit of the insurers, mediators, insurance intermediaries and other organizations related to the insurance sector. It is also concerned with the regulation of the rates, profits, provisions and conditions that may be offered by insurers in respect of general insurance business if it is not controlled or regulated by the Tariff Advisory Committee. It is also entitled to supervise the functioning of the Tariff Advisory Committee. IRDA specifies the terms and pattern in which books of accounts are to be maintained and statement of accounts shall be provided by insurers and other insurance mediators. It also regulates investment of funds by insurance companies as well as the maintenance of margin of solvency. It is also empowered to be involved in the arbitration of disagreements between insurers and intermediaries or insurance intermediaries. It is meant to specify the proportion of premium income of the insurer to finance policies. IRDA also specifies the share of life insurance business and general insurance business to be accepted by the insurer in the rural or social sector.

Impact of IRDA on Indian Insurance Sector:The creation of IRDA has brought revolutionary changes in the Insurance sector. In last 10 years of its establishment the insurance sector has seen tremendous growth. When IRDA came into being; only players in the insurance industry were Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC), however in last decade 23 new players have emerged in the field of insurance. The IRDA also successfully deals with any discrepancy in the insurance sector.

CHAPTER 2 INTRODUCTION TO INDIAN INSURANCE INDUSTRY 2.1. INDIAN INSURANCE INDUSTRY:The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with
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banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC .since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. 2.2. A BRIEF HISTORY OF INDIAN INSURANCE MARKET:Insurance has a long history in India. In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Dharmasastra and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a)- Pre Nationalization b)- Nationalization and c)- Post Nationalization. Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The
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process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001. 2.3. MILESTONES IN THE INSURANCE SECTOR:The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are given in the following table.

Years 1912:

Important milestones in the Indian life insurance business The Indian Life Assurance Companies Act came into force for regulating the life insurance business. The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses. The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public. 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India.

2.4. LIST OF INSURANCE COMPANIES WORKS IN INDIA:Following is the list of all life insurance company granted permission by IRDA. 1. Bajaj Allianz Life Insurance Company Limited 2. Birla Sun Life Insurance Co. Ltd 3. HDFC Standard Life Insurance Co. Ltd
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4. ICICI Prudential Life Insurance Co. Ltd. 5. ING Vysya Life Insurance Company Ltd. 6. Life Insurance Corporation of India 7. Max New York Life Insurance Co. Ltd 8. Met Life India Insurance Company Ltd. 9. Kotak Mahindra Old Mutual Life Insurance Limited 10. SBI Life Insurance Co. Ltd 11. Tata AIG Life Insurance Company Limited 12. Reliance Life Insurance Company Limited. 13. Aviva Life Insurance Co. India Pvt. Ltd. 14. Sahara India Life Insurance Co, Ltd. 15. Shriram Life Insurance Co, Ltd. 16. Bharti AXA Life Insurance Company Ltd. 17. Future Generali Life Insurance Company Ltd. 18. IDBI Fortis Life Insurance Company Ltd. 19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd 20. AEGON Religare Life Insurance Company Limited. 21. DLF Pramerica Life Insurance Co. Ltd. 22. Star Union Dai-ichi Life Insurance Comp. Ltd. 23.India First Life Insurance Company Ltd. 2.5. HOW BIG IS THE INSURANCE MARKET? The insurance sector was opened up for private participation four years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and nonlife segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. There are now 29 insurance companies operating in the Indian market 14 private life insurers, nine private non-life insurers and six public sector companies. With many more joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario. There is pressure from both within the country and outside on the Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion. There are opportunities in the pensions sector where regulations are being framed. Less than 10 % of Indians above the age of
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60 receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new players enter, product innovation and enhancement will increase. The deepening of the health database over time will also allow players to develop and price products for larger segments of society. Insurance is a Rs.400 billion business in India, and together with banking services adds about 7% to India's Gap. 2.6. INDIAN SCENERIO:Indian economy is the 12th largest economy in the world, with a GDP of $1.25 trillion and 3rd largest in terms of purchasing power. With factors like a stable 8-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a rapidly expanding FDI inflows, it is on the hinge of an ever increasing growth curve. Indians have a tendency to invest in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small, 4-5%. This is itself is an indicator that growth potential for the insurance sector is very high. Its a business growing at the rate of 15-20% per annum and presently is of the order of $47.9 billion. India is a vast market for life insurance that is directly proportional to the growth in premiums and an increase in life density. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant. Competition in this market is increasing with companys continuous effort to lure the customers with new product offerings. However, the market share of private insurance companies remains very low, in the range of 10-15%. Even to this day, Life Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of government still dominates the market, with price controls, limits on ownership, and other restraints. The upward growth trend started from 2000 was mainly due to economic policies adopted by the then Indian government. In this year everyone saw the initiation of an era of economic liberalization and globalization in the Indian economy followed by several reforms and long-term policies that created a perfect roadmap for the success of Indian financial markets. CHAPTER 3 INTRODUCTION TO TATA-AIGLIFE INSURANCE COMPANY 3.1. TATA GROUP:-

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The Tata group comprises over 90 operating companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. The total revenue of Tata companies, taken together, was $67.4 billion (around Rs319,534 crore) in 2011-12, with 57 per cent of this coming from business outside India. Tata companies employ around 395,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable. There are 28 publicly listed Tata enterprises and they have a combined market capitalization of about $97.99 billion (as on November 22, 2010), and a shareholder base of 3.4 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels and Tata Communications. Founded by Jamsetji Tata in 1868, Tatas early years were inspired by the spirit of nationalism. It pioneered several industries of national importance in India: steel, power, hospitality and airlines. In more recent times, its pioneering spirit has been showcased by companies such as TCS, Indias first software company, and Tata Motors, which made Indias first indigenously developed car, the Indica, in 1998 and recently unveiled the worlds lowestcost car, the Tata Nano. 3.2. TATA GROUP IN INSURANCE:The Late Sir Dorab ji Tata, was the founder Chairman of New India Assurance Co. Ltd., established in 1919. Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972. Not deterred by the move, Tata group have ventured into risk management services having tied up with AIG group, back in 1977, with the incorporation of Tata AIG Risk Management Services Pvt. Ltd.

3.3. AIG:American International Group, Inc. (AIG), is a major American insurance corporation based at the American International Building in New York City. The British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18thlargest company in the world.
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Company Background: AIGs history dates back to 1919, when Cornelius Vander

Starr

established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese. In 1962, Starr gave management of the company's less than successful U.S. holdings to Maurice R. \"Hank\" Greenberg, who shifted the company's U.S. focus from personal insurance to high.1969. American International Group, Inc is the leading U.S. based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world. AIG's Life Insurance operations comprise of the most extensive worldwide network of any life insurer. AIG's global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, savings products. 3.4. THE JOINT VENTURE - TATA-AIG:Tata AIG Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in the balance 26 per cent. Mr. George Women has been named managing director of Tata AIG Life. Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups. The company headquartered in Mumbai, with branch operations in Delhi, Chennai, Hyderabad, Bangalore Calcutta, Pune and Chandigarh. Tata AIG Insurance Solutions is one of the leading insurance companies that provide both life insurance as well as general insurance. This pioneer company is a joint collaboration between the American International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of 26:74. It is a leading financial institution that has carved a niche for itself all over the world. Tata AIG Insurance provides facilities to both corporate and individuals. Starting its operations on April 1, 2001, it seeks to serve different categories of people. It acquired its license for carrying out operations in India on February 12, 2001. Tata AIG Insurance Solutions is one of the most prestigious organizations in the business world. It employs thousands of employees and offers various opportunities to people to build a prospective career. As a leading name in the financial world, it identifies the potential and experience of the individual. This insurance company identifies the clients needs and works accordingly. It stresses on innovative aspect and opening of new markets. Individual insurance.
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Small business insurance. Corporate insurance.

3.5. PRODUCTS OF TATA-AIG LIFE INSURANCE COMPANY:RISK PLANS Tata AIG Life Raksha Tata AIG Life Plus Assure Lifeline Plans

RETIREMENT PLANS Tata AIG Life Nirvana Tata AIG Life Nirvana Plus Tata AIG Life Assure Golden Year Tata AIG Life Mahalife Gold Tata AIG Life Easy Retire

WEALTH PLANS Tata AIG Life Lakshya Supreme Tata AIG Life Invest Assure Flexi Supreme Tata AIG Life Invest Assure Plus Supreme

CHILD PLANS

Tata AIG Life Starkid Tata AIG Life Assure Career Builder Tata AIG Life Assure Educare Tata AIG Life Assure 21 Money Saver Plan
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HEALTH PLANS Tata AIG Life Health First Tata AIG Life Health Protector Tata AIG Life Health Investor Tata AIG Life Hospi Cash Back

SAVINGS PLANS Tata AIG Life Maha Guarantee Tata AIG Life Assure 10/20/30 Years Security & Growth Tata AIG Life Assure Golden Years Tata AIG Life Shubh Life

3.6. How Company Works:The TATA AIG life insurance company is an insurance company which basically work on two types of channel.

1. TRADITIONAL CHANNEL :-

There are many insurance company which works on traditional channel of marketing. The traditional channel is an old one and still useful in current scenario to move business towards success due to its acceptability and ability. In traditional channel a company has a branch manager under which many sales manager and unit manager do their job and under the sales manager many agents perform their work. In traditional channel there is fix payout of branch manager and sales manager. When we talk about insurance sector the traditional channel of marketing depends on three basics pillars.

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Branch Manager :- An executive who is in charge of the branch office of a bank or financial institution. A branch manager is responsible for all of the functions of a branch office, like hiring employees, approving loans and lines of credit, marketing the branch, building a rapport with the community in order to attract business and assisting customers with account problems. A branch manager is also responsible for making sure that the branch's goals and objectives are met in time.

Sales Manager or Unit Manager :- Responsible for the development and performance of all sales activities in assigned market. Staffs and directs a sales team and provides leadership towards the achievement of maximum profitability and growth in line with company vision and values. Establishes plans and strategies to expand the customer base in the marketing area and contributes to the development of training and educational programs for clients and Account Executives.

Insurance Agent :- Insurance agents, who may be referred to as insurance sales agents, help clients choose insurance policies that suit their needs. Clients include individuals and families as well as businesses. Captive agents work for an insurance company, and only sell that company's products. ADVANTAGE OF TRADITIONAL CHANNEL:A. It is broadly accepted. B. Company provides a fix salary to its member. C. Company has internal control on this channel. LIMITATIONS OF TRADITIONAL CHANNEL:A. Lack of motivation. B. Partly utilization of business capacity.
2. B.S.P. CHANNEL :-

BSP Channel of marketing in TATA-AIG LIFE INSURANCE COMPANY is a new concept of marketing BSP channel is a channel of marketing which is introduced by TATA-AIG life insurance Company. TATA-AIG used it as an external channel to promoting its business. In this cannel company find out a person who has a good team of agents for business.

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 The BSP channel is totally managed by the BSP himself and company never gives them fixed Salary. Company always gives them commission on the basis of their business The basic aim to use BSP channel for marketing by TATA AIG Life Insurance Company is to the reduction in the companys expenses and increasing the business capacity of the company. Often it has been seen that the traditional channels fail to approach some area like typical rural areas for business, but BSP is a person who is well established and well known face in his area. So he can increase companies business with the motive of earn something for himself. The structure of BSP channel is as following.

And

BSP (Business Service Partner):- BSP is a operator of external marketing channel of TATA AIG life insurance Company which means business service partner. BSP is the supreme authority in the companys external channel of marketing. any person who has a team of minimum 10 peoples with him on first day can be a BSP of company but company gives preference to those people who has their own office, a team of minimum 10 people, a good and sound business background and a accountable turnover of their business. A BSP receive four types of payout from the company.

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Agent Identification and Recruitment Fees:-

This is a onetime payout for BSP. It is provided to BSP for first five licensed agent who get recruited by the BSP himself called a direct agent. In this payout company gives Rs.500/new agent.

Development Bonus:-

This is also a onetime payment. In this payout BSP earn commission on development his team. This is based on agents commission which he receives on the FYC of an insurance policy. Commission of B.A. 1000 5000 10000 Bonus for BSP 1000 3500 8500

Over Right Commission:-

This is a monthly commission for BSP. At the end of every month BSP receives this commission from the company. Company gives up to 35% commission to BSP according to predefined payout structure. If a BSP has 60% active member (earn minimum 1000 as their commission) then company gives 150% of this 35% i.e. 52.5%.

Operational Expenses:-

This is also a monthly payment for BSP. Company gives this payment to BSP by assuming that BSP has expenses to manage his team and etc. company gives this payment to BSP on the basis of the no. of active members (receives commission of minimum 1000 every month)in the team of BSP. No. of active member 1-4 5-9 10-19 20-49 50-above OPEX for BSP 1200/member. 1500/member. 1750/member. 2000/member. 2200/member.

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B.A. (Business Associate):B.A. is a second position holder in the hierarchy of BSP channel which means business associate. In this BSP channel B.As are recruited by BSP and it is necessary that the B.A. has a team of minimum three people on first day.

The basic requirements to be a B.A.:-

He has to clear the IRDA exam.

Having a team of minimum three people on first day which have cleared the IRDA exam. A contract in written with company. A B.A. receives the following types or payouts from the company.
1

Development Bonus:-

This is a onetime payment. In this payout BA earn commission on development his team. This is based on agents selling of product or on the FYP of an insurance policy.

Business or FYP BA 8000 20000 40000

DB for 1000 4000 9000 Etc.

Over Right Commission:-

This is a monthly payment for BA. In this over right commission a BA can receives up to 30% of FYC of agents. If BA have a totally new team than company gives it double i.e. 30%*2=60%. And if this BA have 5 active members (sell policies of min. Rs. 1200/month) then company gives 150% of this 60% i.e. 90%.

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Quarterly Bonus:-

Company Gives up to 15% quarterly bonus on FYC of agents to BA according to predefined structure.

Annual Bonus:-

Company gives up to 15% annual bonus on FYC of agents to BA according to predefined structure.

AGENT:An agent is the last stage of last member in BSP channel who sales the policies (companies product). Agent receives commission from the company on the basis of their performance. Any person who full fills the given requirements can join the company as an agent. He has cleared the IRDA exam. Having an authorized license given by the company. Having completed the education till graduation.

Payouts of Agents:An agent simply gets only commission from the company as his compensation. The commission is totally based on his selling or his performance. This commission is vary from product to product. For example in

Mahalife Gold (Endowment Plan) Year 1st year 2nd year 3rd year 4th -15th year Percent 27% 6.5% 6.5% 5%

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Invest Assured Flexi Supreme (ULIP Plan) Year First year Second year Percentage 6% 6%

Raksha (Term Plan) 10%

CHAPTER 4 Learning from the project

A project is an in-depth study of particular subject which is having a wide analysis of every area of subject. When we talk about the project of in the field of marketing management in a particular company, it will defiantly contain all about Company. Companys working process. Companys product.

And in last the most important thing which is practical application of various marketing strategies. During the SIP, I have learned the following
1.

Segmentation:-

Segmentation is a process of dividing the whole market in two groups and selecting those groups which have the population which is suitable for the product . During the SIP my task is to make BSP but every person cant be a prospect for BSP because company gives preference to those person who have a good team and a sound business background. So here I have learned segmentation by selecting hot prospects of BSP from the whole market

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2.

Targeting:-

Targeting is a further stage of marketing after the segmentation. A target market is a set of buyers having common needs that a marketing firm or a company wants to serve. It is seems like segmentation but both are different. After segmentation we have some options/ groups but in targeting we choose only those option/ groups which we want to adopt as our target. In the SIP after segmentation, we have many options as our prospects such as, CAs. BUSINESS FIRMS. INSURANCE/POSTOFFICE AGENTS. CONSULTANTS.

But in the process of targeting we left CAs and decide to approach. BUSINESS FIRMS INSURANCE/POSTOFFICE AGENTS. CONSULTANTS.

So here I can say that I have learned targeting.

3.

Positioning :-

Positioning is the process of making mindset of target market towards the products quality and companys offering in a positive way. In other words we can say that positioning is selecting out the USPs of a product or a offer which can helpful to make is sellable or acceptable. During the SIP I have to position my offer in the mind of targeted person so that he become agree to accept my offer . For the purpose of positioning I founded some main points/ USPs for my offer such as, A chance to be a part of TATA group. Offer for a position equivalent to a branch manager. A chance to be a team leader. A chance to earn money without any monetary investment. Offering various payouts from company.
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These are the points which I used to make a positive mindset about my offer to my BSP prospects. So here I can say that I have learned positioning.

4.

Taking Appointment:-

Appointments mean taking a specific time for meeting from a person which is suitable for him. The basic motive behind taking an appointment is Respect of privacy of everyone, the assumption that everyone is busy and the feeling of treating every one as a special one. During the SIP my task of making BSPs is started with taking an appointment from the clients. For this purpose I used the following process.

Collects the data about cell/landline phone number. Make a phone call. If necessary than make phone call again. Take a specific time for meeting and be available that specific time.

LIMITATION OF THE STUDY:

Time limitation B.S.P. can be search only in Indore. Possibility of Error in segmentation & targeting. Possibility of Error in data collection. Dont get proper response from potential B.S.P. Possibility of failure in converting potential B.S.P into B.S.P. Respondents error.

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Limited resources

6.2. RFERENCES For the references different books, journals, and newspapers have been used and different websites have been used. Name of websites: http://www.reliancelife.com http://www.tata-aig.com/lifeinsurance http://www.tata-aig-life.com/ https://apps.tata-aig-life.com/CP/news/current-news.jsp http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_List.aspx?DF=insprdts&mid=27.1 http://www.economy watch.com/insurance-overview access http://www.managementparadise.com/29381-distribution-channels-tata-aig.html

Name of book and journal:

IC 33 Life Insurance Tata AIG Life Insurance Company Ltd, India, CGAP Working Group on Micro insurance

Name of newspaper: The Hindu The Economic Times, Business Standard Business Bhaskar

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6.2. BENEFITS TO THE COMPANY AND US: During the survey time sales have been done. It is a win-win Situation for both company and me. The benefits of this summer internship program are discussed below. 1. Benefit to the company: 2. Benefit to us: a) Doing internship in Reliance life insurance Company limited has given me immense

experience in the insurance industry for these 60 days. b) Interaction with the customers for survey and sales has developed our marketing skills. c) Working in the office premises has given exposure to corporate world and an experience in working in corporate pressure d) Learn how make tale call (open & closing) e) Segmentation, positioning, targeting in market. BIBLIOGRAPHY Marketing Management- Philip Kotlor, edition-twelth edition.April 2004,. Publisher- Prentice Hall of India (p) Ltd, Analyzing Consumer Markets & Buyer behavior & consumer behaviour. Broachers from Reliance Life Insurance

WEBSITES

www.reliancelifeinsurence.com www.irdaindia.org wikipedia.org www.selling-well.com www.insureme.com www.advisortoday.com

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www.unlockthegame.com

Annexure QUESTIONNAIRES CLIENT DETAIL NAME:_____________________________SURNAME__________________________ DATE OF BIRTH: ______________ (As On Document) Age Proof:_______________________________________________ PRESENTADDRESS_____________________________________________________ ________________________________________________________________________ ________________________________________________________________________ LANDMARK: ______________________PIN ___________ PHONE NO _____________ MOBILE________________

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PERMANENT ADDRESS:

________________________________________________________________________ EDUCATION: _____________ OCCUPATION: _______________________ DESIGNATION: ___________________________ GROSSINCOME:____________________________ NO. OF YEAR JOB / BUSINESS: _______________________ NAME OF ORGANISATION:_______________________________________________ PREVIOUS POLICY DETAILS (IF ANY):

PRODUCT: ______________ _________PREMIUM __________________________ MODE : Yearly/Half-yearly/monthly Payment Mode: CASH / DD / CHEQUE Reference: 1.Mr./Mrs./Miss.____________________Address:_____________Mobile No: 2. Mr./Mrs./Miss.____________________Address:_____________Mobile No: 1. Are you insured? 2. If yes then with Life / Non Life / Both 3. In which company 4. How much give you rank your insurance company ? Excellent Very Good Good Fair Bad 1. Yes 2. No

5. Who suggest you take life insurance policy ? Friends Family Agent Others..

6. In which of the insurance plan you like to invest your money ? Term Endowment Money back Plan Plan Plan Children Plan Pension Plan ULIP Health Plan
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7. Rank the Insurance Company according to your preference? Reliance Life Insurance Company LTD. TATA AIG Life Insurance Company LTD.

THANK YOU!

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