SUMMER TRAINING REPORT ON A CUSTOMER SATISFACTION WITH THE MARKETING STRATEGIES OF RELIANCE LIFE INSURANCE.

Submitted in the Partial Fulfillment for the Requirement of Bachelors of Business Administration (B.B.A) General

BBA V Semester (Evening) (B) Batch 2010-2013

Submitted to: Ms. Kanika Jain Project Guide

Submitted by Arman Taneja Roll No.09924501710

Jagannath International Management School Kalkaji, New Delhi

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STUDENTS UNDERTAKING

I hereby declare that Summer Internship Report is a record of independent work carried out by me at the end of Fourth Semester, June 2012 to Aug 2012 for the purpose of Partial fulfillment of degree of Bachelors in Business Administration for JIMS, kalkaji. This report has not been previously submitted for the award of any university or institution.

Place: New Delhi Signature Date:

AC K N O W L E D G E M E N T

First of fall I would like to thank the Reliance Life Insurance Comapny for giving me such a opportunity to do my summer training from such a reputed organization. I am highly obliged to Mr. RANJAN KUMAR for associating me in this training. He also helped me a lot on my personal front as far as my studies were concerned, by giving me tips to improve my performance. My experience with him as his subordinate is memorable. With due respect and regards I wish to express my deep sense of gratitude, indebtedness and sincere phrases of thanks to Ms. Kanika Jain, for her invaluable mentoring and exuberant guidance. We are highly obliged by the constant support that I have got from my faculty in the project. Starting from the initial stages to the end stages I have received continuous feedback with regard to the progress of the project.

Thank you, once again.

Signature

TABLE OF CONTENTS
S.No 1. 2. 3. 4. TOPIC ACKNOWLEDGEMENT PREFACE EXECUTIVE SUMMARY CHAPTER-1 INTRODUCTION 1.1 5.
Overview Of Industry As A Whole 7

Page. No 3 5 6

CHAPTER-2 COMPANY PROFILE

2.1 2.2 2.3 Problems Of The Organisation Competition Information S.W.O.T Analysis Of The Organisation 32 32 37

6.

CHAPTER-3.0 RESEARCH AND METHODOLOGY 3.1 3.2 3.3 3.4 3.5 Objectives Significance Managerial Usefulness Of The Study Scope Of Study Methodology Adopted 39 40 40 41 42
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7. 8. 9. 10. 11. 12. 13.

CHAPTER-4.0 LITERATURE REVIEW

Marketing Strategy Of Reliance Life Insurance

CHAPTER-5.0 ANALYSIS AND INTERPRETATION CHAPTER-6.0 FINDINGS RECOMMENDATION AND CONCLUSION LEARNINGS ANNEXTURES BIBLIOGRAPHY

58 75 76 77 78 82

PREFACE

This is true statement that experience has much importance than bookish theory. Experience will only gain by the students only when they go some management training. This training which is a part of course helps them to overcome the problems that they face in modern competitive business in future. If we talk about market, this training helps the students in developing some marketing skills in them, through selling policies. For this our students have been known about customer behaviour, preferences,taste etc. I was very lucky enough to work as a summer trainee for a period of two months. The training was interesting, enjoyable, satisfying.. With the help of this training I have built in myself the skills of good marketer, now I have known the customer behavior with respect to services. I have learnt both theoretical as well as practical aspect of business world. So it is necessary for me and even every student of management training programme to have some training programme for practical knowledge of business world as well as all round development of students.

EXECUTIVE SUMMARY

In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors.Specially reliance life insurance. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts of reliance life insurance pushed me 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. The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In insurance sector, distribution channel includes only agents or agency holders of the company. If a company like RELIANCE LIFE INSURANCE, TATA, AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies. Because these companies have attractive policies to capture the wide range of customers. Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer with its communication abilities. So effective agents is very necessary for selling insurance policies.

CHAPTER 1 INTRODUCTION

INSURANCE
Risk and uncertainty are incidental to life. Man may meet an untimely death. He may suffer from accident, destruction of property, fire perils, floods, earthquake and other natural calamities. Whenever there is uncertainty, there is risk as well as insecurity. It is to provide against risk and insecurity that insurance come into being. Insurance does not avert or eliminate loss arising from uncertain events.

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OVERVIEW OF INDUSTRY AS A WHOLE

History of insurance in India

GENERAL INSURANCE 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 redistributed 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. 7

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 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 Associaton 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 1 st 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 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies are 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 de-linking the four subsidiaries from GIC in July, 2002.

Today there are 14 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 14 life insurance companies operating in the country.

The insurance sector is a colossal one and is 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.

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Chapter 2 Company Profile

PROFILE OF THE ORGANISATION

Company Profile of Reliance Life Insurance Founders 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 pound patriot, the larder 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 life time, he built, starting form 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 colossus- an 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 patronized 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 interest 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.

CORPORATE OBJECTIVE
At Reliance life Insurance, we strongly believe that as life is different at every stage, life 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 welltrained advisors, backed by competent marketing and customer services, in the best possible way. It is our aim to become one of the top private life insurance companies in India and to become a cornerstone of RLI integrated financial services business in India.

Corporate Mission
To set the standard in helping our customers manage their financial future. BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY RELIANCE LIFE INSURANCE INSURANCE PLANS AVAILABLE Products (Individual Plans) Savings (Endowment) Reliance Endowment Plan (formerly divya shree) Reliance special Endowment Plan (formerly Subha Shree) Reliance cash Flow Plan (formerly Dhana Shree) Reliance child Plan (formerly Yuva Shree ) 12

Reliance Whole Life Plan Pensions Reliance golden Years Plan (formerly Bhagya Shree) Investments Reliance market Return Plan (formerly Kanaka Shree) Risk / Protection Reliance term Plan (formerly Raksha Shree ) Risk (Protection) Reliance group term assurance policy (formerly group term assurance policy) Reliance EDLI Scheme (formerly EDLI scheme ) Pensions Reliance group gratuity policy (formerly group gratuity policy Reliance group superannuation policy (Formerly group superannuation policy) Reliance Money Guarantee Plan

ABOUT THE COMPANY (RELIANCE LIFE INSURANCE)

Reliance Life Insurance Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani 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

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services. Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services. Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporates

PRODUCTS
The Key benefits of Reliance Automatic Investment Plan are as follows:

A smart plan which adapts to your changing risk profile with increasing age Option to lower the average cost of units through systematic transfer of your funds

Flexibility to switch between funds and plans Options for additional Insurance cover available through riders

Key Features Reliance Automatic Investment Plan

Two plan options to choose from Ready-made and Tailor-made Life Stage asset allocation to ensure automatic change in investment patterns, under the Ready-made Plan option

Freedom to decide your own fund mix based on your risk profile under the Tailormade Plan

Regular, limited, single premium paying options Unmatched flexibility through our Exchange Option Liquidity in the form of partial withdrawal Option to avail of Accidental Death Benefit, Accidental Total, Premium Disability and Term Insurance riders

How does this Plan work? As a customer you will have the liberty to choose between the Ready-made and Tailormade Plan options. The premium contributions made by you, net of Premium Allocation 14

Charges and Sum Assured Related Charges are invested in fund/funds of your choice and units are allocated depending on the price of units for the fund/funds. The Fund Value is the total value of units that you hold in the fund/ funds. The Mortality Charges and Policy Administration Charges are deducted through cancellation of units, whereas the Fund Management Charge is priced in the Unit Value.

Reliance Automatic Investment Plan at a glance Basic Plan Age at Entry Age at Maturity Minimum 30 days 18 years last birthday Maximum 65 years last birthday 80 years last birthday 30 years

Premium Paying 5 years Term Min Sum Assured

Regular / Limited Premium: Annualised Premium for 5 years or Annualised Premium for half of the policy term, whichever higher Single Premium 125% of the single premium amount

Max Sum Assured

No Limit

Benefit Illustration To enable a better understanding on how the plan works, please refer to the below table for Regular Premium. Age of the customer Annual Premium Paid Policy Term 30 25,000 15 15 35 25,000 15 40 25,000 15 45 25,000 15

Premium Paying Term Sum Assured Maturity Values: at 6% investment return at 10% investment return

15 1,87,500

15 1,87,500

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15

1,87,500 1,87,500

4,95,104 6,94,534

4,94,413 6,93,530

4,93,017 4,90,506 6,91,444 6,87,755

Minimum Premium Yearly Regular Premium option Limited Premium Single Premium Min Top Up amount Rs 10,000 Rs 20,000 Rs 25,000 Rs 2,500 Half Yearly Rs 5,000 Rs 10,000 Quarterly Monthly Rs 2,500 Rs 1,000 Rs 5,000 Rs 2,000

Tax Benefit
As per current tax rules premiums paid are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Provided the premium in any years during the term of the Policy does not exceed 20% of the Sum Assured, maturity and withdrawals are eligible for tax benefit under Section 10(10D). Death benefits are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section 80C premiums up to Rs 100,000 are allowed as deduction from your taxable income. Service tax and education cess will be charged extra as per applicable rates. Please note that all benefits payable under the policy are subject to tax laws and other financial enactments as they may exist from time to time. It is recommended that you consult your tax advisor.

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The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market, and the insured is responsible for his/her decisions.

Reliance Life Insurance Company Limited is only the name of the Insurance Company and Reliance Automatic Investment Plan is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.

Tax laws are subject to changes with retrospective effect and consulting a tax expert for an opinion is recommended.

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. Yes, it's a trio the pace setter plan, which promises Life Protection, an opportunity to gain control over your investments along with protection of downside risk! For the select few like you, the Reliance Money Guarantee Plan is a Unit Linked product addressing comprehensive need to strike that perfect balance of Protection and Savings that you deserve as you grow successfully. The Reliance Money Guarantee Plan is a Regular Premium Unit Linked Policy which guarantees the entire premium (including premiums for top- ups) paid by you. This is a plan which helps you reap all the benefits of a rising market simultaneously protecting you from the downside risk of the market.

Reliance Money Guarantee Plan at a glance Basic Plan Age at Entry Age at Maturity Policy Term Optional Riders Term Life Insurance Benefit Rider Minimum 30 days 18 years last birthday 10 years Maximum 55 years last birthday 80 years last birthday 30 years

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Age at Entry Age at Maturity Policy Term Sum Assured

18 years last birthday 23 years last birthday 5 years 25,000

59 years last birthday 64 years last birthday 30 years Up to basic Policy Sum Assured

Accidental Death and Accidental Total and Permanent Disablement Rider Age at Entry Age at Maturity Policy Term Sum Assured 18 years last birthday 23 years last birthday 5 years 25,000 60 years last birthday 64 years last birthday 30 years Up to basic policy Sum Assured subject to a maximum of Rs 50,00,000 on accidental death and Rs 500,000 per annum on total permanent disability.

What if I want to discontinue the Policy? You may surrender your Policy at any time after three years from commencement. A. Full Surrender Value under Basic Plan : The Surrender Value will be the Fund Value including Return Shield Fund if selected as on the date of intimation of surrender under Basic Plan less Surrender Charge as given below. On surrender of Basic Plan, any attaching Top-Ups will also be surrendered. No partial Surrender Value is available under Basic Plan. Year of surrender Basic Plan 1 to 3 2 3 18 Surrender Value not available Surrender Charge as % of Fund Value of including Return Shield Fund if selected

4 5 6+

5% 3% Nil

B. Full Surrender Value or Partial Withdrawal Value under Top-Up: This will be available on completion of three years from the date of payment of top-ups. The lock-in period of three years will not be applicable to top-ups paid in the last three years of the plan. The full Surrender Value or Partial Withdrawal Value is equal to the Fund Value being surrendered or being withdrawn. There is no Surrender Charge or Partial Withdrawal Charge. If a partial surrender is taken from the top-up, the Capital Guarantee on death and maturity (i.e. the minimum Death Benefit of top-up premium on death at any time during the Policy Term and the minimum Maturity Benefit of top-up premium paid provided a period of at least 10 years has elapsed from the date of payment of topup) will cease immediately on that Tranche of top-up.

Charges under the plan Premium Allocation Charges: This is a percentage of the premium appropriated towards charges from the premium received.

Year Year 1 Year 2 Year 3 onwards

Premium Allocation Charge ( as percentage of premium amount) 30% 7% 5%

For top-up premium the Allocation Charge is 2%. 19

In case of policies under Exchange Option, the Allocation Charge in year of exchange will be 15% of the annualised premium of Reliance Money Guarantee plan. During subsequent years, the Allocation Charges mentioned in the above table will apply. Policy Administration Charges: Rs 40 will be deducted per month per Policy (charged monthly through cancellation of units). Fund Management Charges: The Fund Management Charges under each fund are given below: Fund Name Fund D Fund E Fund F Return Shield Fund DC Annual Rate 1.35% p.a. 1.38% p.a. 1.40 p.a. 1.25% p.a. 1.30% p.a.

The Fund Management Charge on each day is three hundred and sixty fifth of the Annual Charge and will be deducted from the Assets of the Unit Linked Fund. Switching Charge: First four switches in any Policy Year are free. There will be a charge of Rs100 per switch on subsequent switches. Charge for Return Shield Option: There will not be any charge for the Return Shield option under following circumstances:

If the option is selected under Basic Plan on commencement of the plan If the option is selected under top-up at the time of payment of top-up

Under all other circumstances, a fixed charge of Rs 100 is payable every time the Return Shield option is selected Mortality Charge: The Mortality Charges is based on your attained age, are determined using 1/12th of the charges mentioned in the Mortality Charge table below and are deducted by canceling the units from your fund every month. Surrender Charge: This charge is levied on the Fund Value at the time of surrender of the Policy as under: 20

Year of Surrender of Basic Plan/top-ups 1 to 3 4 5 6 onwards

Surrender Charge as a percentage of fund value Not allowed 5% 3% Nil

Service Tax & other applicable charges: These charges are to be levied on the Mortality Charge and on Rider Premiums. The level of this charge will be as per the rate of Service Tax along with the other applicable taxes/ charges on risk premium, if any, as declared by the Government from time to time. The current rate of Service Tax (including the Education Cess on Service Tax) on risk premium is 12.24%. Currently, this charge is borne by the Company. However, the Company reserves the right to pass on this charge as well as other charges/taxes to the Policyholder in future. Miscellaneous Charge: Fixed Miscellaneous Charge of Rs 2 per Rs 1000 Sum Assured will be collected on inception of the Policy. Premium for Rider Benefits: Premium for Rider Benefits will be collected over and above the premium under Basic Plan.

Recovery of Charges
The one time Miscellaneous Charge on commencement of the Policy and the Allocation Charges will be deducted from the premium amount before allocation of units. The Fund Management Charges will be priced in the Unit Price of each Fund. Mortality and Policy Administration Charges will be collected monthly in advance by cancelling the units at prevailing Unit Price.

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Switching Charge and Return Shield Charge will be collected at the time of transaction by cancelling the units at prevailing Unit Price. The Surrender Charge, if applicable, will be deducted from the Fund Value as a percentage of the Fund Value. Rider premiums will be collected over and above the premiums under Basic Plan and will not be deducted through cancellation of units. In the event that units are held in more than one fund, including Return Shield Fund, the cancellation of units will be effected in the same proportion as the value of units held in each Fund. In case the Fund Value in any Fund Value goes down to the extent that it is not sufficient to support the proportionate applicable monthly charges, then the same shall be deducted from the Fund Value of the other funds proportionately.

Change in rate of charges

The revision in charges as mentioned below will take place only after obtaining specific approval of the IRDA. A notice of three months will be given to the Policyholders before any increase in the charges. If the Policyholder does not agree with the modified charges, he/she shall be allowed to withdraw the units in the plan at the then prevailing Unit Value after paying it if any and terminate the Policy. The Fund Management Charge may be increased up to 2.50% p.a. The Policy Administration Charge may be increased up to Rs75 per month per Policy. The Switching Charge, charge for selecting STP option can be increased up to Rs 1000 per transaction. The Surrender, Premium Allocation, Mortality, Miscellaneous Charge and premium rates under riders are guaranteed for the term of the Policy. How safe is your investment? Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors

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1. The Policy has a Capital Guarantee feature whereby all premiums paid are guaranteed on death and at maturity. The Capital Guarantee is not applicable on additional and rider premiums. The top-up premiums are guaranteed on death at any time during the Policy Term provided there is no partial withdrawal. The topup premiums are guaranteed on maturity provided the top- ups were made 10 years before the maturity date and that there is no partial surrender of that top-up up to maturity. 2. The premium paid in Unit Linked life insurance policies are subject to investment risks associated with Capital Markets and NAVs of the units may go up or down based on the performance of fund and factors influencing the Capital Market and the Insured/Policyholder is responsible for his/her decisions. 3. The Unit Price is a reflection of the financial and equity/debt market conditions and can increase or decrease at any time due to this. 4. Benefit payable under the Policy will be made according to the tax laws and other regulations in force at that time. 5. Fund D, Fund E, Fund F, Fund C and Return Shield Fund are the names of the funds offered currently with Reliance Money Guarantee Plan, and in any manner does not indicate the quality of the respective funds, their future prospects or returns. 6. Please note that Reliance Life Insurance Company Limited is only the name of the Insurance Company and Reliance Money Guarantee Plan is only the name of the Unit Linked Life Insurance Policy and does not in anyway indicate the quality of the Policy or its future prospects or returns. 7. The past performance of other funds of the Company is not necessarily indicative of the future performance of any of these funds. 8. Fund C, Fund D, Fund E, Fund F & Return Shield Fund do not offer a guaranteed or assured return.

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What if I want to discontinue the Policy? i. Within three years of the inception of the Policy: The Capital Guarantee under the Basic Plan and Top-Ups, if any will cease immediately. The Rider Benefits and Insurance Cover under Basic Plan will cease immediately. However you will continue to participate in the performance of Unit Funds. The Monthly Administration Charges will be deducted from the Fund Value by cancellation of units. The Fund Management Charge will be priced in the Unit Value. You may revive the Policy by re-commencing the premium payment within a period of three years from the due date of first unpaid premium but before the Maturity Date of the Policy. In the event the Policy is not revived during Revival Period, the Policy shall be terminated and the Surrender Value, if any, shall be paid at the end of the period allowed for revival. Anytime during this period, should the Life Insured die, the Fund Value including Return Shield Fund under the Basic Plan will be paid. The Fund Value including Return shield fund under the Top-up Fund if any will also be paid. The Fund Value will be calculated on the date of intimation of death to the Company. ii. After paying of at least 3 full years' premiums: The Capital Guarantee under the Basic Plan and top-ups if any will cease immediately. The Rider Benefits will cease immediately. The Insurance Cover under the Basic Plan will continue. You will continue to participate in the performance of Unit Funds. The Mortality and Administration Charges will be deducted from the Fund Value by cancellation of units. The Fund Management Charge will be priced in the Unit Value. You may revive the Policy by paying all due premiums in full at any time within a period of three years from the due date of first unpaid premium but before the Maturity Date of the Policy. At the end of the allowed period for revival, if your Policy is not revived, the Policy shall be terminated by paying the Surrender Value. 24

However, you may opt to continue the Policy even beyond the Revival Period (but not beyond the Maturity Date of the Policy). The Mortality and Administration Charges will be deducted from the Fund Value by canceling the units. The Policy will continue to participate in the performance of the Unit Funds chosen by you. The Life Cover will continue until the Fund Value under Basic Plan and top-ups if any, reaches an amount equivalent to one full year's premium plus Surrender Charge, if any. When the Fund Value including Fund Value under Return Shield if selected reaches an amount equal to one full year's premium, the Policy will be terminated by paying one full year's premium. In the event of death of the Life Assured during this period (provided the age of the Life Assured is more than 12 years last birthday as on date of death) the maximum of (Sum Assured, Fund Value including Return Shield Fund under Basic Plan) plus the Fund Value including Return Shield Fund under the top-up if any will be paid. The Fund Value will be calculated on the date of intimation of death to the Company. In the event of death of the Life Assured during this period (provided the age of the Life Assured is less than or equal to 12 years last birthday as on date of death) the Fund Value including Return Shield Fund under Basic Plan plus the Fund Value including Return Shield Fund under the top-up if any will be paid. The Fund Value will be calculated on the date of intimation of death to the Company.

Grace Period for payment of premiums There is a grace period of 30 days from the due date for payment of regular premiums. In case of monthly mode, the grace period is of 15 days. A Policy lapses if premiums are not paid within the days of grace.

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Revival of a discontinued Policy You may revive a Policy by paying the arrears of premiums and recommencing the payment of premiums at any time within a period of 3 years from the due date of first unpaid premium but before the Maturity Date of the Policy subject to satisfactory Medical and Financial Underwriting. On revival of the Policy, the Capital Guarantee under Basic Plan and top- ups will be reinstated if it was available at the time of discontinuance of premium payment under the Policy. If the Basic Plan is revived, the Term Rider can be revived by paying the arrears of premiums with interest at the prevailing rate of interest. The current rate of interest is 9.5% p.a. This will be subject to satisfactory Medical and Financial Underwriting. If the Basic Plan is revived, the accidental Death Benefit and Total and Permanent Disablement Rider can be revived by recommencing the payment of rider premium subject to satisfactory Medical and Financial Underwriting.

Tax Benefit As per current tax rules premiums paid are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Provided the premium in any years during the term of the Policy does not exceed 20% of the Sum Assured, maturity and withdrawals are eligible for tax benefit under Section 10(10D). Death Benefit are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section 80C premiums up to Rs 100,000 are allowed as deduction from your taxable income. Service Tax and Education Cess will be charged extra as per applicable rates. Please note that all benefits payable under the Policy are subject to tax laws and other financial enactments as they may exist from time to time. You are recommended to consult your Tax Advisor.

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General Exclusion If the Life Assured commits suicide within 12 months from the date of commencement of risk or date of revival of this Policy, whether sane or insane at that time, we will limit the Death Benefit to the Fund Value and will not pay any Insured Benefit. The Capital Guarantee will not be available.

Optional Rider Benefits Accidental Death & Accidental Total and Permanent Disablement Benefit: This Benefit increases the Life Coverage in case of Accidental Death or Accidental Total and Permanent Disablement at a very nominal additional cost. You have the option of taking or removing the rider anytime during the Policy Term subject to satisfactory Medical and Financial Underwriting provided the criteria under minimum and maximum age at entry, Policy Term, Premium Payment Term, Sum Assured are satisfied. The premium for the rider is payable over and above the premium for the Basic Plan, and not by the cancellation of units. Term Life Insurance Benefit: You have the option of taking or removing the Term Life Insurance Benefit Rider at any time during the term of the Policy subject to Medical and Financial Underwriting provided the criteria in respect of minimum and maximum age at entry, Policy Term, Premium Payment Term, Sum. Assured are satisfied. The maximum Sum Assured under Term Life Insurance Benefit Rider will be equal to the Sum Assured under Basic Plan. Exclusions to Accidental Death & Accidental Total and Permanent Disablement Benefit Rider Reliance Life Insurance will not be liable to pay any Accidental Death Benefit Claim or Total and Permanent Disablement Claim which results directly or indirectly from any one or more of the following:

An act or attempted act of self injury Participation in any criminal or illegal acts 27

Being under the influence of alcohol or drugs Racing or practicing racing of any kind other than on foot Flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognized airline or charter service.

Participating in any riot, strike or civil commotion, active military service, naval air force, police or similar services or

War, invasion, act of foreign enemies, hostilities or war like operations (whether war be declared or not), civil war, mutiny, military rising, insurrection, rebellion, military or usurped power or any act of terrorism.

Reliance Cash Flow Plan While most insurance plans block your money for a certain period of time, Reliance Cash Flow Plan gives you the double benefit of life insurance along with easy liquidity through lump sum cash. It provides money periodically when you need it. It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow by giving you the flexibility of receiving a specified percentage of the Sum Assured at specified intervals.

Key Features

Easy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at the end of every three years

Wealth creation through bonus additions On maturity receive accumulated bonuses along with final lump sum payout More value for your money by way of High Sum Assured Rebate Full Sum Assured plus bonuses in case of your unfortunate death. This is over and above the Survival Benefits already paid Option to add two riders Critical Illness Rider and Accidental Death Benefit & Total and Permanent Disablement Rider

28

How does this Plan work? You pay premium every year for the entire term and get Survival Benefits at periodical intervals as mentioned below. On death, your Beneficiary will get the full Sum Assured, plus accumulated bonuses, over and above the Survival Benefits already paid to you.

Benefits
a) Survival Benefit: Get a percentage of the Sum Assured on the fourth anniversary and on every third Policy Anniversary till maturity. b) Maturity Benefit: On maturity you get the remaining percentage of the Sum Assured plus accumulated bonuses. c) Life Cover Benefit: In the unfortunate event of loss of life, your Beneficiary will receive the full Sum Assured plus accumulated bonuses till that date. d) Rider Benefit: You also have the option to add two additional benefits to customize the Policy as per your needs: I. II. Accidental Death Benefit & Total and Permanent Disablement Rider Critical Illness Ride

Accidental Death Benefit & Total and Permanent Disablement Rider Accidents are unfortunate and sometimes fatal. You can customise your basic Policy with an Accidental Death & Total and Permanent Disablement Benefit Rider. The Accidental Death benefit is payable if death occurs directly as a result of an accident and is intimated within 90 days of the occurrence. The Benefit payable is equal to the Rider Sum Assured. The minimum Sum Assured is Rs 25,000 and the maximum under all Policies taken together is Rs 50,00,000. The Total and Permanent Disablement Benefit is payable if the Life Assured becomes totally and permanently disabled directly as a result of an accident.

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The Disablement Benefit is equal to the basic Sum Assured paid in ten equal annual installments Total and Permanent Disablement is defined as the total and irrecoverable loss of sight of both eyes, or loss by severance of two limbs at or above wrist or ankle, or total and irrecoverable loss of the sight of one eye and loss by severance of one limb at or above wrist or ankle for a period of at least six months Inbuilt Waiver of Premium If the Life Assured becomes totally and permanently disabled, then Reliance Life Insurance will waive all future premiums under the basic Policy and riders up to a limit of Rs 40,000 p. a.

Accidental Death Benefit & Age at entry Age at expiry

Total and Permanent 18 yrs 25 yrs

Disablement Rider 59 yrs 64 yrs Rs 50,00,000 (Basic Policy Sum

Sum assured

Rs 25,000

Assured subject to a maximum of Rs 50,00,000 per life)

Exclusions The Company will not pay any Accidental Death Claim or Total and Permanent Disablement Claims which results directly or indirectly from any one or more of the following:

An act or attempted act of self-injury, Participation in any criminal or illegal act, Being under the influence of alcohol or drugs except under direction of a registered medical practitioner,

Racing or practicing racing of any kind other than on foot, flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognised airline or charter service, 30

Participating in any riot, strike or civil commotion, active military, naval, air force, police or similar service, or

War, invasion, act of foreign enemies, hostilities or war like operations (whether war be declared or not), civil war, mutiny, military rising, insurrection, rebellion, military or usurped power or any act of terrorism or violence.

Critical Illness Sudden onset of a major illness causes worries and heavy expenses. Our optional Critical Conditions Cover helps provide financial relief in such cases. It pays you the Sum Assured upfront in respect of ten major illnesses. a. Cancer b. Coronary Artery Bypass Surgery c. Heart Attack d. Stroke e. Kidney Failure f. Aorta Surgery g. Coma h. Heart Valve Replacement i. j. Major Organ Transplant Paralysis

This Benefit can be availed only once against any one of the illnesses and the Company will not pay the claim if it arises from deliberate self-injury or attempted suicide by the Life Assured, whether sane or insane. This benefit will only be given, if the diseases are confirmed by a Consultant Physician.

31

Critical Illness Rider Age at entry Age at expiry 18 yrs 25 yrs 59 yrs 64 yrs Rs 10,00,000 (Basic Policy Sum Sum assured Rs 1,00,000 Assured subject to a maximum of Rs 10,00,000 per life) Minimum Policy Term 5

2.1 PROBLEMS OF THE ORGANIZATION

Based on the problem of study the researcher has found out some objectives, which are consider while preparing the research. They are: Satisfaction of people from the products and services of insurance companies is quite high. Around 65% of the people are satisfied from the working of insurance companies and feel that the problems faced are handled properly and as quickly as possible

2.2

COMPETITION INFORMATION

Major players in the insurance industry in India Life insurers LIFE INSURANCE CORPORATION OF INDIA (LIC) Life insurance Corporation of Indian (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilize peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country.

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The corporation also transacts business aboard and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures aboard in the field of insurance, namely, ken-India Assurance Company limited, Nairobi; united oriental assurance company limited, Kuala Lumpur; and life insurance corporation (international), E.C. Bahrain. It has also entered into an agreement with the sun life (UK) for marketing unite linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income form premium and investments of $ 5billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LICs income grew at a healthy average of 10 percent as against the industrys 6.7 percent growth in the rest of Asia (3.4 percent in Europe, 1.4 percent in the US). LIC has even provided insurance cover to five million people living below the poetry line, with 50 percent subsidy in the premium rates. LICs claims settlement ratio at 95 percent and GICs at 74 percent are higher than that of global average of 40 percent. Compounded annual growth rate for life insurance business has been 19.22 percent per annum.

GENERAL INSURERS: GENERAL INSURANCE CORPORATION OF INDIA (GIC)

The general insurance industry in India was nationalized and a government company known as general Insurance Corporation of India (GIC) was formed by the central government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurer which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company limited; (ii) New India assurance company limited; (iii) Oriental Insurance company limited; and (iv) united India Insurance company limited. (However, with effect form Dec 2000, these subsidiaries have been de-linked form the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is

33

presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies. In Addition To Above State Insurers The Following Have Been Permitted To Enter Into Insurance Business:The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market industry has seen new and innovative steps taken by the players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased form 95% (2002-03) to 82% (2004-05). LIFE INSURERS:

HDFC STANDARD LIFE INSURANCE COMPANY LTD.

HDFC standard life insurance company ltd. Is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions? It is a joint venture between housing development finance corporation limited (HDFC ltd.), Indias leading housing finance institution and the standard life assurance company, a leading provider of financial services from the united Kingdom. Their calmative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. they have managed to cover over 11,00,000 individuals out of which over 3,40,000lives have been covered through our group business tie-ups.

MAX NEW YOURK LIFE INSURANCE CO. LTD.

Max New York life insurance company limited is a joint venture that brings together two large forces- max India limited, a multi business corporate, together with new York life international, a global expert in life insurance. With their various products and riders,

34

there are more than 400 product combinations to choose form. They have a national presence with a network of 57 offices in 37 cities across ltd.

ICICI Prudential Life Insurance Company Ltd.

ICICI prudential life insurance company is a joint venture between ICICN bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI prudential was amongst the first private sector insurance companies to being operations December 2000 after receiving approval form insurance regulatory development authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.

Om Kotak Mahindra insurance Co. Ltd.

Kotak Mahindra old mutual life insurance ltd. Is a joint venture between Kotak Mahindra bank ltd. (KMBL), and old mutual plc. Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Adity Birla group and Sun Life financial services of Canada.

GENERAL INSURERS Royal Sunbdaram Alliance Insurance Company Limited The joint venture bringing together royal & sun alliance insurance and Sunbdaram finance limited started its operations form march 2001. The company is head quartered at Chennai, and has two regional offices, one at Mumbai and another one at New Delhi. Bajaj Allianz General Insurance Company Limited Bajaj Allianz general insurance company limited is a joint venture between Bajaj auto limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz general insurance received the insurance regulatory and development authority (IRDA) certificate of registration (R3) on May 2nd, 2001 to conduct general insurance business (including health insurance business in India. The company has an authorized and paid up capital of Rs. 110 crores. Bajaj auto holds 74% and the remaining 26% is held by Allianz, AG, Germany.

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ICICI Lombard General Insurance Company Limited ICICI Lombard general insurance company limited is a joint venture between ICICI bank limited and the US-bass $ 26 billion Fairfax financial holdings limited. ICICI bank is Indias second largest bank, while Fairfax financial holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada ltd, a group company of Fairfax financial holdings limited, is one of Canadas oldest property and casualty insurers. ICICI lombarda general insurance company received regulatory approvals to commence general insurance business in august 2001. Cholamandalam General Insurance Company Ltd. Cholamandalam ms general insurance company limited (Chola-MS) is a joint venture of the Murugappa group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year or operations. The company has a pan-indian presence with offices I Chennai, Hyderabad, Banglore, Kochi, Coibatore, Mumbai, Pune, Indore, Ahmedabad, Delhi , Chandigarh, Kolkata and vizag.

TATA AIG General Insurance Company Ltd.

Tata AIG general insurance company ltd. Is a joint venture company, formed form the tata group and American international group, inc. (AIG). Tata AIG combines the strength and integrity of the Tata group with AIGs international expertise and financial strength. The Tata group holds 74 percent stake in the two insurance ventures while AIG holds the balance 26 percent stake. Tata AIG general insurance company, which started its operations in India on January 22, 2001 offers the complete range of insurance for automobile, home personal accident, travel, energy, marine, property and casualty, as well several specialized financial lines. Reliance General Insurance Company Limited. IFFCO Tokio General Insurance Co. Ltd. 36

Export Credit guarantee Corporation Ltd. HDFC-Chubb General Insurance Co. Ltd.

2.3

S.W.O.T ANALYSIS OF THE ORGANIZATION

Business firms undertake SWOT analysis to understand the external and internal environment. SWOT, which is the acronym for Strength, Weakness, Opportunities and Threats, is also known as WOT-UP Analysi. Through such an analysis strength and weakness existing within an organization can be matched with the opportunities and threats operating the environment so that an effective strategy can be formulated. An effective organization strategy, therefore, is one that is capitalized on the opportunities and through the use of strengths and neutralizes the threats maximizing the impact of weakness.

STRENGTH:
Has sold 5 lakh policies, being maximum in the private sector. Brand power. Strong assets and infrastructure. Market share of 32.5%. Number I the private sector.

Industry in nascent stage. Awareness about private life insurance companies is very less. Still not very popular in rural market. Very few branches in the country. L. of operational activities.

WEAKNESS:
-

OPPORTUNITY:
Liberalization of Indian economy. Life Insurance sector opening up. Very small percentage of population insured in India One of best products in the market. 37

Global market opportunity.

THREAT:
Lack of proper technical knowledge among the mass. Apprehension towards ICICI Prudential being a private life insurance company. LIC: very big player. Change in government policy may affect the growth and expansion of the Insurance sector and the company. -

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CHAPTER 3 RESEARCH AND METHODOLOGY

3.1

OBJECTIVES

Setting objective is also a very toughest part of my research, but I have some objectives which are as follows: To determine customer-buying behavior with a focus on market segmentation for Reliance life Insurance. To get some knowledge about insurance sectors specially reliance life insurance. To know the behavior of consumers about service sectors. To highlight the competition exist in insurance sectors. To make aware of my self and readers about the plans of reliance. To make awareness about policies of reliance life insurance. To make awareness about programmes of reliance life insurance. To enhance the knowledge of financial sectors, financial problems and their Solutions. 1 To examine the image of insurance companies in the minds of people, which I have done through surveys and interviews. 2 3 To show the position of reliance life insurance among its competitors. To show the market segmentation of reliance life insurance.

. SPECIFIC OBJECTIVES: To determine reasons behind opting for an insurance. To provide the company with information of customers insurance policy if they have any and reasons for opting for that particular policies. To known the most preferred policy. 39

To determine customer perception towards private insurance companies and their expectation form private insurance companies.

3.2 SIGNIFICANCE
The first stage involved initial discussion between the various team members and the company in order to identify the research objectives (Rationale of the research), which is the most difficult step in the research process. But I have to show the significance of my research. My research have great significance. Because of my this research I have learnt so many things. Now, it is necessary for me to show significance from two point of views. My point of view Readers point of view MY POINT OF VIEW 4 I have done my research from both the sources PRIMARY and SECONDARY sources. 5 In primary source I had used the sampling which helps me in knowing the point of people about different insurance companies. 6 In secondary sources I had collected information through internet, magazines which enhances my knowledge. 7 I have learnt the marketing strategies of my reliance life insurance while doing training.

3.3

MANAGERIAL USEFULNESS OF THE STUDY

The research is primarily both exploratory as well ad descriptive in nature. I have explore my ideas in research and also I have given the description of each and every thing in my research. Whether it is reliance life plans or any other thing. So my research is both exploratory as well as descriptive. The sources of information are both primary & secondary. In Primary sources I have taken responses to different respondents, and I have shown these responses in the form of pie charts which is very useful for managerial study because pie chart is easily understandable. In secondary sources I have used different magazines, articles, books and websites. 40

I have prepared a well structured questionnaire for peoples preferences about insurance companies. I have conducted surveys for preparing questionnaire, my sample size is of 400 respondents. And out of this I have collected the responses in different subject matters related to insurance. I have also conducted personal interviews which of well structured in nature. In personal interviews I have taken the views of people about investments, tax saving, and other matters.

3.4

SCOPE OF STUDY
To determine the feedback on services provided by any other insurance agent. This is done through different surveys , interviews. There are many insurance companies exist in India as well outside India so there is a need to take feedback from different respondents about their preference.

To study the types of benefits provided by insurance services. Each and every company of insurance provided different benefits to consumers. There may be more or less differentiation among the services provided by different insurance companies. Some times plans of different insurance companies are seems to be identical but there are some changes occurs in the plans.

To determine the use of internet for valuable information and decision-making process. Basically internet is very useful tool for collecting information and decision making process. In my research I have given many matter from internet. In every organization managers use internet as a source of information for their important decisions making. GOOGLE helps in getting information from any place of the world.

To know the impact of privatization of insurance sector on public. Now insurance is not confined only on public sector only , there are many private companies enters in insurance sector. Now public prefer private insurance companies for insurance and investment purposes. So private companies of insurance are doing better government companies because of attractive schemes.

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3.5

METHODOLOGY ADOPTED

A. Preparation of Questionnaire: Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to known the accuracy of the questionnaire. The final questionnaire was arrived only after certain important changes were done. B. Sampling Method: Sampling method followed was judgmental sampling. The customer was selected on a random basis form different parts of Delhi. c. Sample Size:The sample size was restricted to only 400, which comprised of mainly peoples form different regions of Delhi due to time constraints.

STEPS IN THE MARKET RESEARCH

Identification of the object (problem) Initial collection of the date from secondary sources. Identification of sample size and sampling area. Formulation of the questionnaire. Collection of the primary date thru field work. Analysis and interpretation of the collected data. Preparation of the research report along with observations & recommendations.

Benefits of Insurance Cover

Cover Future Uncertanity

Tax Deductions

Future Investment

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CHAPTER 4 LITERATURE REVIEW

MARKETING OF INSURANCE IN INDIA

Insurance is in a manner of speaking the last frontier in the financial sector the open. It is also a sector, which leads to benefits across the full spectrum, form the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. In an under-insured economy, newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

Marketing Mix Policies

Different companies can choose to position themselves differently and hence the marketing mix are different. However there are certain common characteristics that one can cull out form the possible strategies that companies adopt. Product: The development of flexible products to suit individual requirements is what will differentiate the winners form the also-rans. The key to success is in providing insurance salutations, not standardized insurance products. The concept of riders/optional benefits has already been a huge innovation brought about by the new players, which has led to customization of products for individual needs. However, companies may differentiate themselves on the basis no product segments that they choose to focus on and excel in. Place: Different companies may however choose different channels and different geographies to focus on. The channel options are-tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. Many companies like HDFC Standard Life are focusing on all channels whereas companies and includes every that interaction that the customer has with the company, such as 43

sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these. Price: Price is a relevant differentiator only in two segments- pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long-term returns generated are more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good long-term maturity value for customers. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge. Promotion and Advertising: The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these. Process: Cashless Settlement: One of the most defining and customer friendly changes that weve seen in recent years relates to the way claims settlements are made. The advent of the third-party administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless settlement of health auto insurance claims. TPRs are entities who process claims on behalf of insurer: the IRDA license them after it is satisfied that they have the financial strength, the trained manpower, the infrastructure and the skill to undertake this activity. Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for cashless settlement of auto insurance claims.

44

Lower Premiums: The sprit of competition and the broadening of the risk experience of insurance companies have contributed to a fall in premiums over the years. Thats because other things being equal, an insurer who covers the lives just of 10 people bear a higher risk that an insurer who covers the lives of, say, 100 people. Further, a broader base will provide grater efficiencies on costs such as distribution, management and claims. A broad basing of the mortality experience, therefore, gives insurers the elbowroom to complete by lowering premiums, and that trend is expected to continue. Premium Payment Flexibility: Insurers have imparted certain flexibility to premium options in order to address this concern. For instance, one now have the opeion to pay your premiums upfront, which is then carried forward for the tenure of the policy. They yearly premiums are drawn form the initial corpus. Insurers have also introduced the concept of automatic cover maintenance to protect your policy form lapsing owing to your omission to pay your premium on time. Under this, in the event f your not paying the premium, the insurer dips into your investment account to the extent of the premium. Of course, this comes with an in built drawback: your investment portion diminishes year on year to the extent of the amount paid to cover your risk. Physical Evidence: This can play a significant role for marketing in the Indian scenario. Since internet users are comparatively lesser than countries such as US, the off-line mode will be preferred in India. Although the distribution model is largely agent-based, wherever the customer is in contact with the company, this factor can play a significant role in luring the customer. People: The most important factor that materializes sales and maintains customer relationships on a long-term basis is this factor. No matter what distribution strategy a company adopts customer base on a long-term basis.

45

MARKETING STRATEGY/ DISTRIBUTION CHANNELS

Analysis of the insurance industrys marketing tactics reveals the extent of their influence on patient care and medical research. These tactics can be arranged into five categories according to the potential for harm to patients (from least to most harmful): physicians-targeted promotions, direct- to-consumer advertising, unethical recruitment of physicians, researchers conflicts of interest, and data manipulation in clinical trials. Drug companies promotions subconsciously influence physicians prescription patterns. Heavy advertising to consumers results in more prescriptions being written, whether or not the new drug is in the best interests of patients, and therefore strongly correlates with sales increases for the promoted new drug. The insurance industrys public relation firms unethically recruit physicians to endorse their companies clinical studies. Researchers financial conflicts of interest often influence results in the corresponding studies; in many cases, the employed researchers receive extra financial benefits, such as stock options and funding for future projects, from the drug company for which they are conducting clinical trials. Insurance companies manipulate research data to prevent negative data from leaking to the public. Much evidence suggests that the insurance industrys economic influence on the medical field is substantial.

PHYSICIANS-TARGETED PROMOTIONS Drug companies promotions subconsciously influence physicians prescription patterns. In 2002, the insurance industry spent $ 5.63 billion on promotions, which include free office supplies, all-expenses-paid events, sales representatives, and awards to physicians (Parker and Pettijohn, 2003, p. 283). Dr. Israel reports that, of this promotional budget, $8,000 to $ 3,000 is spent on each physician (2003, p. 533). In Orlowski and Wateskas study of prescription patterns, doctors assert that the insurance companys all-expenses-paid seminars at popular sunbelt vacation site[s] do not affect their objectivity ( 1992, p. 270). Yet, when Orlowski and Wateska compared the number of prescriptions written for two promoted drugs before and after the physicians attended the seminar, they found that the numbers of prescriptions for those two drugs, when compared against the national average, significantly increased after the seminar. Promotion-induced subconscious influence is a widely studied phenomenon. 46

A 10-year study of internists at seven university hospitals, published in 1990, found that frequent contact with sales representatives also changed prescription practice (Israel, 2003, p. 533). Eleven years later, in a 200 study, Parker and Pettijohn reach the same conclusion: Doctors who had contact with insurance representatives were 3 times more likely to ask that a particular drug be added to an insurance plans list of approved drugs (2003, p. 283). An ideal physician provides his or her patients the best available care for the most economical price; however, despite physicians reassurances, studies show that promotions influence how they prescribe. If doctors under subconscious influence prescribe the promoted drug and it is a more expensive alternative, thereby causing patients to incur higher treatment costs, in theory at least, the patients are still receiving quality care.

DIRECT-TO-CONSUMER ADVERTISING Heavy direct-to-consumer (DTC) advertising strongly correlates with increased sales for the promoted drugs but, in terms of both money and health, may not be in the best interest of patients. Between 1990 and 1998, the number of patients who sought medical attention for allergy symptoms hovered around 4 million; the number sharply rose to 8 million in 999. This rise coincided with the expenditure in the same year of 5%+ of the $ .85 billion DTC advertising dollars that were targeted at prescribed oral antihistamines. (This 5 % accounts only for the three most heavily advertised and prescribed oral antihistamines: Claritin, Allegra, and Zyrtec). The following data better illustrate the fact that higher expenditures in drug advertisements result in an increase in the number of prescriptions written for that drug and thus, greater profitability. In 1999, prescriptions for the top 25 DTC- advertised drugs rose 34.2% and sales grew by 43% over the previous years figures (NIHCM-2000, p. 2, Figs. , 2, 5). DTC advertising rose from $2.3 billion in 2000 to a projected $7.5 billion in 2005 (Parker and Pettijohn, 2003, p. 279). These numbers suggest that advertisements may have prompted those who previously had no need for the drug to imagine that their conditions were more serious and needed the help of the drug (Parker and Pettijohn, 2003).

47

The average cost of developing a new drug is estimated to be $300 million to $600 million(1). The drug companies spend huge amount of money on developing new drugs, as well as they also spend lavishly in sales promotion to earn profits. This highly competitive insurance industry is also the most profitable in United States with a 13% return on the sales in 1989. It is estimated that at least $5 billion were spent on marketing in USA a decade ago(2). As per the informal study of the marketing executives of different insurance companies, it was found that about 21-25% of different companies spend the turnover on the sales promotion. According to the latest annual report of Reliance Life Insurance Ltd., the company spent 20 crore rupees on sales promotion for the year ending 31st Dec. 2001(3). Social scientists describe and the insurance industry follows the, norm of reciprocity i.e., the obligation to help those who have helped you, as one of the fundamental guiding principle of human interactions. It is not surprising, therefore, that insurance companies rely on this principle of human nature by giving gifts to physicians in hope that they will prescribe their firms product in return. Physician and insurance Industry Interaction Interaction of the medical professional with the insurance industry starts as early as in medical school. The physician and sales representative meet about 4 times a month. These interactions are controversial in many ways. According to one school of thought, the interaction is necessary for education, information and biomedical research. In contrast, others see in such arrangement the essence of good bribery, and have concern that all such contracts between doctors and industry involve compromise and should therefore be avoided as far as possible.insurance companies is devoted in modifying the drug prescribing behaviour of the physicians. The policies adopted by the insurance firms may include extravagant marketing practices like: (a) Offering vacation/travel expenses; (b) Gifts of substantial value; (c) Lavish meals and entertainment; (d) Offering cash/ commission for prescribing a particular brand/ drug; (e) Offering money for drug trial; ( f ) Samples and promotional material; and (g) CME funding and honoraria(10). (a) Vacation Expenses. The expenses for travel, stay and even local sight seeing are paid directly to the tour operator by the insurance company or travel ticket and hotel accommodation are booked by the company in the name of the physician. The expenses of not only the physician but also of their spouse and family are borne by the 48

insurance companies. This new dimension of family sponsorship is threatening to reduce academic exercises to social outings. Evidence supports that drug company sponsorship of travel expenses change the prescribing behavior of physicians. These doctors who avail the travel expense are 4.5-10 times more likely to prescribe the companys product after such sponsorship than before. The ties between clinical researchers and industry include not only grant support, but also a host of other financial arrangements. Researchers serve as consultants to these companies whose products they are studying. They also join advisory boards and speakers bureaus, enter into patent and royalty arrangements, agree to be listed authors of articles ghost written by interested companies, promote drugs and devices at company sponsored symposiums, and allow themselves to be plied with expensive gifts. They may also have equity interest in the companies. India, being a developing country with large patient load, that is usually illiterate and economically jeopardized, has enormous potential for being exploited by multinational drug companies with mammoth financial strength. All this makes our population an easy target of even some of the very risky drug trials. More so, when lucrative incentives are offered to the physicians. Some of the insurance companies offer money based on the number of patients/volunteer recruited for drug trials by the physicians.

Samples and promotional material Almost all insurance companies offer drug samples and promotional material meant specifically for physicians. Nearly more than 90% of residents receive patient education items(18). Frequency of receiving drug samples varies from 5.4% daily to 48% monthly among physicians(19). There appears nothing wrong in accepting drugs samples and related promotional literature that helps in improving the knowledge and skill on new drugs and devices. However, offering a physician $100 to simply read a companys literature that encourages prescribing of a manufactured by the company. One of the senior executive belonging to a fairly well known drug company during informal chat disclosed to this author that one doctor even demanded honeymoon package in Switzerland for his son in lieu of prescribing a newly introduced drug by his company. Money for drug trial 49

Newer drugs are added in the insurance market at a very fast pace. Before license to manufacture a drug is issued, it is mandatory to have clinical studies about its advantage and other related issues. Most clinical studies that help in bringing out new more than half of the income of the organizers of CME/symposia is generated from insurance industry. The interaction between physicians and insurance industry shares some common interests like: (a) use of drugs in treatment and care; (b) monitoring of the drug use; and (c) innovation of new drugs. However, both parties have different emphasis and focus on different stakeholders. Physicians are primarily interested in patient care and scientific advances, while industry is more interested in commercial outcome. Business houses or corporate bodies run insurance firms. They spend huge amount of money in interacting with the physicians. This is not done as an act of generosity, but it is a well planned marketing strategy employed by the insurance industry to bolster their bottom lines. The act of receiving gifts and other benefits from the insurance firm by physicians establish relationship with the giver and assumes certain social duties such as: grateful conduct, grateful use, and recipro-cation. It is bound to compromise the physicians decision making. Further, it is also unrealistic to expect the insurance industry that contribute large sums of money in different manner to physicians, will not influence their attitude and behavior towards them. Since no profit minded company would distribute gifts and other freebies out of disinterested generosity. In the context of medicine, however, many feel that the act of accepting a gift has far reaching ethical consequences that put the gift at too great a price. Key Points The interaction between physicians and insurance industry has transformed into a marketing strategy. The freebies offered by the insurance industry to physicians are not an act of disinterested generosity and ultimately costs the patient. Formulation and strengthening of ethical norms and MCI code to regulate the physicianinsurance industry interaction is the need of the hour. As it expands its core business, the industry is being forced to adapt its business model to recent changes in the operating environment. The first and most significant change

50

was the January 1, 2005 enactment of an amendment to Indias patent law that reinstated product patents for the first time since 1972. The legislation took effect on the deadline set by the WTOs Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which mandated patent protection on both products and processes for a period of 20 years. Under this new law, India will be forced to recognize not only new patents but also any patents filed after January 1, 1995[2]. Indian companies achieved their status in the domestic market by breaking these product patents, and it is estimated that within the next few years, they will lose $650 million of the local generics market to rightful patent-holders[42]. In the domestic market, this new patent legislation has resulted in fairly clear segmentation. The multinationals narrowed their focus onto high-end patients who make up only 12% of the market, taking advantage of their newly-bestowed patent protection. Meanwhile, Indian firms have chosen to take their existing product portfolios and target semi-urban and rural populations. The new patent regime to have taken effect at a time when Indian companies had recently started to aggressively pursue global opportunities, so it is not clear whether the flurry of international activity surrounding the enactment date is a result of the change in legislation. Mergers, acquisitions and alliances have been taking place on an unprecedented scale, most notably with companies in the U.S. and Europe. As stated in The Hindu Business Line, In the last 10-odd months, the Indian pharma industry has possibly seen the single largest number of global transactions in its 50-year history. These transactions provide Indian companies with access to foreign markets and facilitate the process of seeking regulatory approval for new products, which can be quite daunting for a company that only has operations on Indian soil.[10] Product development Companies are also starting to adapt their product development processes to the new environment. For years, firms have made their ways into the global market by researching generic competitors to patented drugs and following up with litigation to challenge the patent. This approach remains untouched by the new patent regime and looks to increase in the future. However, those that can afford it have set their sights on 51

an even higher goal: new molecule discovery. Although the initial investment is huge, companies are lured by the promise of hefty profit margins and the recognition as a legitimate competitor in the global industry. Local firms have slowly been investing more money into their R&D programs or have formed alliances to tap into these opportunities. Small and medium enterprises As promising as the future is for a whole, the outlook for small and medium enterprises (SME) is not as bright. The excise structure changed so that companies now have to pay a 16% tax on the maximum retail price (MRP) of their products, as opposed to on the ex-factory price. Consequently, larger companies are cutting back on outsourcing and what business is left is shifting to companies with facilities in the four tax-free states - Himachal Pradesh, Jammu & Kashmir, Uttaranchal and Jharkhand. As SMEs wrestled with the tax structure, they were also scrambling to meet the July 1 deadline for compliance with the revised Schedule M Good Manufacturing Practices (GMP). While this should be beneficial to consumers and the industry at large, SMEs have been finding it difficult to find the funds to upgrade their manufacturing plants, resulting in the closure of many facilities. Others invested the money to bring their facilities to compliance, but these operations were located in non-tax-free states, making it difficult to compete in the wake of the new excise tax. Strategies to face the Major Marketing Challenges:Technological Strengthening The most common strategic concern that 2005 has raised for Indian insurance companies is the perceived need for technological strength. Companies are faced with the realization that the only way they can continue to sell first generation drugs (in the absence of licensing or distribution agreements) is by discovering and developing them indigenously. For Indian firms, there are two routes to this end. They can either latch onto the skills of MNCs or they can embark on programs to develop their own technical capacities. Most Indian firms surveyed here have decided that new drug discovery is an unfeasible short term goal and have consequently pursued more modest technological programs. Sun

52

and Lupin fall into this category. While acknowledging that new drug discovery belongs on their long-term horizons, they have devised strategies that afford profitable operations without new drugs. Both have worked to bring more of the production process under their own control (through forward and backward integration) while simultaneously sharpening their existing R&D practices. Lupin, for example, prides itself on its innovative line extensions. Even if these companies had more capital at their disposal, they would be unlikely to pursue new drug discovery programs because their managers firmly believe that technological competence needs to be fostered gradually. Redefining New Drug Discovery Several Indian companies (e.g., Ranbaxy, DRL, Dabur, and Wockhardt) are turning the prospect of increased patent protection to their advantage by spearheading new drug discovery programs. Their efforts have attracted much attention. Skeptics assert that Indian companies are not large enough to discover and develop their own drugs successfully. Indian companies also lack the experience of the major players; leading MNCs have spent the better part of the twentieth century honing R&D skills. Developing new drugs is time- and capital- intensive. Companies usually test thousands of substances in order to bring a single product to market. However, companies such as DRL have advanced products to the clinical trials phase only a decade after initiating new drug discovery programs. Their costs have been substantially lower than global benchmarksfor example, Anji Reddy, chairman of DRL, estimates his research costs are one eightieth of those of his MNC competitorsand their success rate has been higher. Indian companies have yet to place their own products on global markets, but there is reason to believe that at least some of their endeavors will succeed as planned, although potential complications (such as the emergence of unexpected costs) could still result. Even if one accepts DRLs exceptional cost claims, Indian companies are still advised to seek ways to reduce costs and risks, and thereby, to increase new drug discovery, which remains, in essence, a hit-or-miss affair. Several options are available. First, contracting with other firms to aid in various stages of the research process seems to be a preferred course of action. Both DRL and Ranbaxy have allied with foreign firms to conduct costly clinical trials in Western markets. This amounts to giving up profit potential in exchange for reducing exposure, and allows the Indian companies to devote 53

more resources to the core of the discovery process. Firms also find relief at the front end of the research process by taking leads from public R&D centers and other companies that focus on early stage (in vitro) screening of new compounds. Second, some companies are considering investment in combinatorial chemistry in order to increase the volume of molecules with which they have to work. Third, some Indian companies emphasize practices that are designed to improve success rates. For example, DRL focuses almost solely on a related chain of Syndrome X diseases that have similar causes and similar cures. Public research Most individuals surveyed for this paper were decidedly negative about Indias public research facilities. In theory, public R&D labs should be an invaluable resource to Indias smaller drug companies because they allow them access to lead molecules and other specialized R&D functions that they could not otherwise afford. In practice, however, the current quality of such labs is so poor that relying on them for survival, in the opinion of most experts, is one of the biggest mistakes companies can make. A notable exception to this maxim is the Indian Institute of Science (IIS), which has been quite successful at conducting clinical trials. Whether or not other public research labs can follow IIS example remains to be seen. Growing Larger Indian companieswhich have traditionally limited themselves to domestic production and distributionmust therefore grow larger to enter discovery and clinical trials in addition to their current operations, and/or to expand to developed export markets. This section reviews the means by which these companies are growing. Mergers, Acquisitions, and Partnerships The process of consolidation is well under way. Five of the twelve firms covered in this paper have engaged in some sort of M&A activity, while two others have purchased large assets from competitors over the past five years. Mergers have occurred between Indian companies such as DRL and Cheminor, between MNC subsidiaries such Hindustan Ciba-Geigy and Sandoz India (Novartis), and between Indian and foreign companies. With respect to acquisitions, companies such as Ranbaxy, Sun, and DRL have purchased assets from firms based in other countries in order to expand their international presence. M&A has also been motivated 54

by the desire to shift focus, toward or away from revenues dependent on technological processes. Suns acquisition of Knolls bulk lab, for example, was motivated by the formers technological strengthening program, in addition to the latters skeptical attitudes about the post-2000 patent laws. Partnerships and marketing alliances are also increasingly common. These provide companies with the opportunity to join forces without the drawbacks and complications associated with formal marriage. Knoll is actively pursuing a strategy to court foreign multinationals without an India presence (including a fifteen year agreement with NovoNordisk) to distribute their products after 2005. Conversely, other Indian companies are looking to international partners to market, distribute, and gain approvals for their products in foreign markets. Help from Parent Companies Some MNC subsidiaries (e.g., HMR, Knoll, and Glaxo) have adopted a more relaxed posture toward 2005 than India-based companies. For them, adaptation consists of waiting to see where opportunity lies and then capitalizing on it by transferring resources from their parent organization. Market Diversification Presence in multiple markets, especially in the regulated markets, is a positive from the credit perspective. Low entry barriers in the unregulated markets make companies serving only these markets vulnerable to considerable pricing pressures. The quality and process requirements of the regulated markets also act as entry barriers for lowend players and this offers a degree of stability to prices and volume sales. Companies targeting exports to unregulated markets alone are often characterised by low margins, long credit periods, and low returns on capital employed, with the result that they are likely to have significantly low coverage numbers. However, a companys ability to sustain its presence in the regulated markets is an issue that ICRA evaluates by considering its track record, its R&D investments, its approved manufacturing capacities, its current product portfolio and pipeline, its current and proposed distribution arrangements, and such other factors. Some of the bigger Indian insurance companies have already established a strong distribution network in the regulated markets. Most medium and small companies are however still in the process of establishing their presence in these markets. 55

Strong domestic market presence is considered a positive by ICRA. The highly competitive nature of the domestic insurance market imposes strong low-cost manufacturing discipline, which is a key strength in this industry. Also strong distribution network and brand presence may open up in-licensing opportunities from original patent holders targeting the Indian market. ICRAs assessment of domestic market presence includes analysis of the therapeutic mix of the domestic sales of the company. A diversified therapeutic presence, relatively strong market position in key segments, and focus on new product introductions are considered positive by ICRA. On the other hand, high therapeutic or product concentration exposes a company to significant business risks. The movement in market share data and ranking in the relevant segments over the years are also analysed to understand the trend and consistency in the companys performance. Strong sales network and first-mover advantage in a segment hold the key to developing a strong brand, and are given adequate weightage by ICRA.

While low-cost manufacturing capability is a key strength for Indian insurance companies, it is also critical for those targeting exports to regulated markets to maintain systems and processes that ensure product quality. ICRA, therefore, assesses the systems followed by the company during manufacturing, its testing facilities, the quality of its trained manpower, and the quality of its documentation during manufacturing. Backward integration may be crucial in sustaining cost advantages in exports, as that usually provides for greater value addition. For instance, some Indian manufacturers have been able to sustain profitability even after over 90% price erosion on generics, through effective cost control. Upgrading and maintaining a manufacturing facility that meets the standards of the regulated markets call for significant financial commitments. Also, inspection and approvals being a time-consuming process, companies with existing facility approvals from agencies like US FDA4, UK MHRA5, and ANVISA6 can have a crucial time advantage over others. Besides, companies with quality manufacturing facilities can also cash in on potential opportunities in the field of contract manufacturing and custom synthesis.

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The insurance industry operates in a very dynamic environment, with significant events in one marketlike product development, patent expiry and regulatory changesoften impacting players in other markets. Exports opportunities also throw up complex management challenges, with profitability (and price erosion) being influenced by niche opportunities, unique chemistries or dosage forms, and complex legal and marketing issues. These have become particularly relevant, given the retaliatory strategies increasingly being adopted by innovator companies to thwart generic challenges. Quality of management remains a key factor for all credit ratings. Lack of a seasoned management team in areas like R&D, regulatory affairs, business development, and manufacturing can significantly increase the business risks of a insurance company. The industry is also seeing several acquisitions, driven by the need for inorganic growth. Besides a strong balance sheet, depth in management is a prerequisite for the successful handling of integration related issues that acquisitions throw up almost invariably. Going forward, there would be increasing competition for the trainedmanpower available, especially in critical areas like R&D and business development. Therefore, professional management structure and focus on human resources would be of crucial importance for the industry.

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CHAPTER 5 Analysis And Interpretation

1. DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES COMPANYS NAME L.I.C. RELIANCE LIFE INSURANCE ICICI PRUDENTIAL SBI LIFE HDFC TOTAL NO. OF 312 12 40 28 8 400 SHARE (%) 78 3 10 7 2 100

INTERPRETATION The sample size is 400. 78% Respondents prefer LIC for life insurance policies, 3% respondents prefer RELIANCE LIFE INSURANCE, 10% respondents prefer ICICI PRUDENTIAL, 7% respondents like SBI LIFE, and last 2% respondents prefer HDFC.

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2. DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPNDENTS BENEFITS NO. OF RESPONDENTS Cover Future Uncertainty Tax deductions Future Investment Total 220 80 100 400 55 20 25 100 SHARE (%)

Cover Future Uncertanity Tax Deductions

Future Investment

INTERPRETATION 55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy. Whereas, 20% and 25% of them believe that the other benefits are tax deduction and future investments respectively. 3. DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED RESPONDENTS FEATURE NO. OF RESPONDENTS Money Back Conversance Larger Risk Conversance Easy Access to Agents Low Premium 148 28 120 37 7 30 60 15 SHARE (%)

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Companys Reputation TOTAL

44 400

11 100

Features Of Insurance Policy

Money Back Conversance Larger Risk Conversance

15 37 100 7 11 30

Easy Access to Agents Low Premium Companys Reputation

INTERPRETATION Majority of the respondent (37%) found larger risk conversance as the most attracted feature of the all.

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4. DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS POLICY TYPE LIFE POLICY NON LIFE POLICY BOTH NO. OF RESPONDENTS SHARE (%) 210 70 126 75 25 45

NATURE OF POLICY

LIFE POLICY BOTH

INTERPRETATION 75% of the respondents have life insurance policy while 45% have both. (The % is calculated out of 280 positive response)

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5. DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE RESPONSE NO. OF RESPONDENTS A saving tool A tax saving device A tool to protect your family 324 296 400 81% 74% 100% SHARE(%)

Share (%)

100%

81%

74%

INTERPRETATION 81% of the respondents have perception of insurance being a saving tool. And 74% of the respondents have perception of insurance being a tax saving device.But 100% of the respondents are with the view that insurance is a tool to protect your family.

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6. DATA SHOWS PEOPLES HAVING INSURANCE RESPONSE Yes No Total NO. OF RESPONDENTS SHARE (%) 280 120 400 70% 30% 100%

30% 70%

INTERPRETATION Of the sample size of 400 surveyed respondents 70% of the respondents are having insurance policy. 30% of the respondents are either not having any insurance policy at present or there is already matured. And at present 100% of the respondents are with the view that insurance is a tool to protect your family.

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7. DATA SHOWS BUYING PROCESS OF THE PEOPLE BUYING PROCESS Customer approached insurance company /agent Company/agent approached customer Total 400 100% 222 55.5% NO. OF RESPONDENTS SHARE (%) 178 44.5%

Customer approached insurance company/agent Company/agent approached customer

INTERPRETATION 44.5% of the respondents approached the insurance company/agent. Whereas, 55.5% of the respondents were approached by the company/ agent.

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8. DATA SHOWS REASONS BEHIND FOR INSURANCE RESPONSE Tax saving Saving/investment Family protection NO.OF RESPONDENTS 226 226 280 SHARE(%) 80.71% 80.71% 100%

Share (%)

80.71%

INTERPRETATION 80.71% of the respondents opted for insurance for insurance for tax saving benefits. 80.71% of the respondents opted for saving/investments. But all of them, i.e. 100% of the respondents have opted for insurance for their family protection.

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9. DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY

40% 60%

0%

Satisfied

Not satisfied

Not Responded

INTERPRETATION 60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded. 10. DATA SHOWS SATISFACTION OF + RESPONDENTS WITH RESPECT SERVICE AGENT RESPONSE Satisfied Not Satisfied Not Responded Total NO. OF RESPONDENTS 246 154 0 280 SHARE (%) 45% 55% 0.0% 100% TO

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Satisfied

Not Satisfied

45%

55%

INTERPRETATION 45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded. 11. DATA SHOWS NUMBER OF ESPONDENTS PAYING TAX RESPONSE Paying tax Not paying tax Total NO. OF RESPONDENTS SHARE (%) 400 400
0%

100% 0% 100%

100%

Paying tax

Not paying tax

INTERPRETATION Of the sample size of 400 respondents, all the respondents are paying tax. 12. DATA SHOWS REPONDENTS INVESTMENTS FOR TAX SAVING

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INVESTMENTS

NO. OF RESPONDENTS

SHARE (%)

LIC NSC Bonds PPF PF EPT

204 133 129 101 84 46

51% 33.25% 32.25% 25.25% 21% 11.5%

11.50% 21% 25.25% 33.25% 33.25% 51%

LIC NSC Bonds PPF PF EPF

INTERPRETATION 51% of the respondents save their tax by investing in LIC, which is the highest among all investment. This shows that most people for getting taxes benefits invest in LIC. 33.25% of the respondents do their tax saving by investing in NSC. 32.25% of the respondents to their tax saving by investing in bonds. 13. DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF INVESTMENT FOR THEIR FUTURE NO. OF RESPONDENTS SHARE (%) Fixed Assets Bank deposits Jewellery Securities i.e. bonds, MFs 68 301 44 100 162 75.25% 11% 25% 40.5%

Shares

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10.5%

Fixed assets Bank deposits Jewellery Securities i.e. bonds, MFs Shares

INTERPRETATION 75.25% of the respondents as with the view that fixed assets is the best form of investment for security their future. 70.5% of the respondents are with the perception that insurance is the best form of investment for security their future, which is one of the highest and this shows that insurance is an important key for security your future. 14. DATA SHOWS WHAT PEOPLE INTENT TO FAIN FROM THEIR INVESTMENT RESPONSE Saving & Returns Security Tax benefits NO. OF RESPONDENT 400 360 287 SHARE (%) 100% 90% 71.75%

Share (%)

71.75%

100%
Saving & Returns Security

90%

Tax benefits

INTERPRETATION 69

100% of the respondents intent to gain saving and returns from their investment. 90% of the respondents intent to gain security form their investments. Whereas, 71.75% of the respondents intent to gain tax benefits form their investments. 15. DATA GIVES PEOPLES PERCEPTION ON APPROPRIATE AGE FOR BUYING INSURANCE RESPONSE After 25 years After 35 years After 45 years Anytime
After 25 years

NO. OF RESPONDENTS SHARE (%) 116 42 0 242

After 35 years After 45 years

29% 10.5% 0% 60.5%

Anytime

INTERPRETATION 29% of the respondents are with the view that insurance should be bought after the age of 25 years. 10.5% of the respondents are with the view that insurance should be buoyed after the age of 35 years. Whereas, 60.5% of the respondents are with the view that buying of insurance do not have any thing to do with age i.e. there is no age limitation. it can be purchased any time according to the need.

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16. DATA SHOWS PEOPLE OPINION ABOUT INDIAN INSURANCE COMPANIES RESPONSE NO. OF RESPONDENTS Rigid plans Non user friendly Unsatisfactory services Non Aggressive Satisfactory Good Very good 268 118 106 143 96 41 0 67% 29.5% 26.5% 35.75% 24% 10.25% 0% SHARE (%)

10.25% 24% 35.75% 26.50%

0% 67% 29.50%

INTERPRETATION 67% of the respondents have the opinion that Indian insurance companies have Rigid plans. 29.5% feel that Indian insurance companies are non-user friendly. 26.5% feel that service of Indian insurance companies are unsatisfactory. 35.75% of the respondents are with view that Indian insurance companies are nonaggressive. 24% of the respondents feel that products and services of Indian insurance companies is satisfactory . Whereas only 10.25% feel that it is good enough. And according to the data , no single person has felt that it is very good.

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17. DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE COMPANY RESPONSE A trusted name Friendly Service & Responsiveness Good plans Accessibility 326 199 81.5% 49.75% NO. OF RESPONDENTS 328 284 SHARE (%) 82% 71%

Share (%)

A trusted name

Friendly service & responsiveness

Good plans

Accessibility

INTERPRETATION 82% customers look for a trusted name in a company for insurance. 81.5% customers look for a good plan in a company for insurance.

Friendly service & responsiveness and accessibility are also important factors looked by customers in a company.

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18. DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS RESPONSE Planning Not planning Total NO. OF RESPONDENTS 350 50 400 SHARE (%) 87.5% 12.5% 100%

12.50%

87.50%

Planning

Not planning

INTERPRETATION Only 12.5% of the customers contacted are not planning for new investment presently. Whereas, 87.5% of the customers are still planning for new investments this can be a great potential Reliance Life Insurance to take them on their favor.

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19. DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS RESPONSE Yes No Uncertain Total NO. OF RESPONDENTS 172 176 52 400 SHARE (%) 43% 44% 13% 100%

Yes

No

Uncertain

INTERPRETATION The interested customer i.e. 43% are ready to go for insurance even away form a city of services and products are worthwhile, which again is a good prospect (potential) for Reliance Life Insurance to take them on their favor.

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CHAPTER 6 FINDINGS
I have my summer training from reliance life insurance where I find so many things. Both positive and negative things. My findings are as follows: The work environment was very good and encouraging in reliance life insurance. Trainers always motivates the trainees at every extent. Company spent much money on providing facilities to trainees The training was very stress full. We were under stress about completing our insurance selling targets. One thing I found in the organization that advisors do not have much respect than others. While selling policy I have found that consumers have different type of attitude about investment plans. Some consumers have a very rough attitude towards policy and policy agent. In 45 days of training I sell insurance policies, and I found that selling insurance policies is more complicated task than selling a product.

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CHAPTER 7 RECOMMENDATIONS AND CONCLUSION

As the people think that insurance is a tool protect their family & a tax saving device. They are aware of the fact & realizing its, importance. The company should try to expand & build up its infrastructure because there is a large potential for insurance in India. Company should come up with its branch in Delhi. With the objective and goals to meet the demands & expectations of the public. Because the entrance of private players will increase the completion and it would be a tough task to secure a good position in market. Since Reliance Life Insurance is leading with several companies policies it should be easy for them to penetrate into the market and secure a good position if they pay greater attention to the service part provided to their customer and there by forming a long and trusted relationship. As seen from the survey that at present 70% of the customer are having insurance policy out of which 87.5% of the customer are planning for new investments. So it can be a good potential for the company and they should make an attempt to trap these customers. 43% of the customer is even ready to go for insurance if a service provider away form their home is providing it. But intend they should provide good products and services. The company should provide good products and services. The company should try to convince these customers and get them in its favor.

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CHAPTER 8 LEARNINGS
First of all it taught me and my team members what insurance is all about. The visit to various companies (organizations) gave us an excellent opportunity to know, learn and understand various intangible things like their thinking patterns, how to deal with different type of people in such a way so as to achieve our goals. In order to get some information of some work done out of somebody it is very important to highlight his interest in the whole affair. The communication skills were improved a great deal upon. The exposure to the field, taught how to deal with the difficulties and limitations of the market. How to identify and understand the needs of the customers. How to interact in the corporate world. Last, but not the least it made me realize what an opportunity lies ahead of me in this very field of insurance. The project A CUSTOMER SATISFACTION WITH THE MARKETING STRATEGIES OF RELIANCE LIFE INSURANCE. has been mainly conceived with a view to have a insight of insurance sector & to provide the company with essential factors which are looked upon by the customers as well as buying behavior of the insurance policy. It has been observed that people perception regarding insurance is that it is a tool to protect their family, a tax saving device etc. people are focused towards the benefits of the insurance & a strong need in felt for having the insurance. People are in the process of buying policies one after the other and they do not feel the need of age specification for purchasing insurance. As the private insurance companies are emerging, people are having preoccupied thinking that they will provide better products & services.

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CHAPTER 9 ANNEXURE
QUESTIONNAIRE ARE YOU EMPLOYED? Yes No

If yes, only then proceed 1. Do you have any insurance policy? Yes No

2. WHICH INSURANCE POLICY DO YOU HAVE? Life Non-Life Both 3. WHICH C0S INSURANCE POLICY YOU PREFER THE MOST? (RANK THEM) LIC ICICI PRUDENTIAL SBI LIFE INSURANCE ING VYSYA LIFE RELIANCE LIFE INSURANCE TATA AIG LIFE ANY OTHER 4. HOW DO YOU LOOK FOR IN AN INSURANCE COMPANY? A TRUSTEE NAME FRIENDLY SERVICE AND RESPONSIVENESS GOOD PLAN ACCESSIBILITY

5. ARE YOU INTERESTED IN FOR GOING FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE AND PRODUCTS? YES

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NO UNCERTAIN 6. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COVER? COVER FUTURE UNCERTAINTY TAX DEDUCTIONS FUTURE INVESTMENT ANY OTHER 7. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT? LOW PREMIUM LARGER RISK CONVERSANCE MONEY BACK GUARANTEE REPUTATION OF COMPANY EASY ACCESS TO AGENTS ANY OTHER ___________(specify)

8. ARE YOU PLANNING FOR YOUR INVESTMENT? PLANNING NOT PLANNING 9. WHAT YOUR OPINION ABOUT INDIAN INSURANCE COMPANIES? RIGID PLANS NON USER FRIENDLY UNSATISFACTORILY SERVICE NON AGGRESSIVE e. SATISFACTORY d. GOOD e. VERY GOOD

10 WHATS YOUR PERCEPTION ABOUT INSURANCE? A SAVING TOOL A TAX SAVING DEVICE C) A TOOL TO PROTECT FUTURE 79

11. HOW HAS/ WOULD YOU BOUGHT/BUY AN INSURANCE? CUSTOMER APPROACHED INSURANCE COS INSURANCE COS APPROACHED CUSTOMER 12. ARE YOU SATISFIED WITH THE POLICY? SATISFIED SAVING TOOL NOT SATISFIED NOT RESPONDING 13. ARE YOU SATISFIED WITH THE SERVICE AGENT? SATISFIED SAVING TOOL NOT SATISFIED NOT RESPONDING 14. DO YOU PAY TAXES? Yes No

15 WHERE HAVE YOU INVESTED OR TAX SAVING? LIC NSC BONDS PPF PF EPF 16. WHICH IS THE BEST FORM OF INVESTMENTS? FIXED ASSETS BANK DEPOSITS JEWELLERY SECURITIES, I.E. BONDS, MFS SHARES INSURANCE 17. WHAT DO YOU INTENT TO FAIN FORM INVESTMENTS? SAVING & RETURNS SECURITY TAX BENEFITS 80

18. WHAT THE RIGHT AGE TO BUY INSURANCE? a) After 25 years b) after 35 years c) after 45 years d) anytime 19. WHY YOU BOUGHT INSURANCE POLICY ? a) tax saving b) saving\ investment c) family protection

81

CHAPTER 10 BIBLIOGRAPHY

BOOK/MAGAZINES REFFERED:
AUTHOR NAME BY AIMS INSURANCE

BOOK NAME PRINCIPLES & PRACTICE OF LIFE \ GENERAL PUBLISHING HOUSE INSURANCE INSTITUTE OF INDIA. INSURANCE WATCH MONEY OUT LOOK

WEBSITES REFFERED:

http://www.reliancelife.co.in/website/aboutus.asp http://www.reliancelife.co.in/website/products/reliance_endowment_plan.asp http://www.reliancelife.co.in/website/products/reliance_special_endowment_plan. asp http://www.reliancelife.co.in/website/products/reliance_special_endowment_plan. asp http://www.reliancelife.co.in/website/products/reliance_cash_flow_plan.asp http://www.reliancelife.co.in/website/products/reliance_child_insurance_plan.asp http://www.reliancelife.co.in/website/products/reliance_term_plan.asp http://www.reliancelife.co.in/website/products/reliance_whole_life_insurance_pla n.asp http://www.reliancelife.co.in/website/products/reliance_market_return_plan.asp http://www.reliancelife.co.in/website/products/reliance_golden_years_plan.asp http://www.reliancelife.co.in/website/tnc.asp

REPORTS / ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY 30 SEPT 2007 BRIEF PROFILE OF LIC, INDIA . DEC 2007 REPORT: COPING WITH COMPETITION .. JAN 2008 82