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What is Insurance ?
Insurance is the equitable transfer of the risk of a loss, from one entity to another
in exchange for payment. It is a form of risk management primarily used
to hedge against the risk of a contingent, uncertain loss. An insurer, or insurance
carrier, is a company selling the insurance; the insured, or policyholder, is the person
or entity buying the insurance policy. The amount of money to be charged for a
certain amount of insurance coverage is called the premium. Risk management, the
practice of appraising and controlling risk, has evolved as a discrete field of study
and practice.
The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's promise
to compensate (indemnify) the insured in the case of a financial (personal) loss. The
insured receives a contract, called the insurance policy, which details the conditions
and circumstances under which the insured will be financially compensated.

Definition
Insurance as a form of contract or agreement under which one party
agrees in return for a consideration to pay an agreed amount of money to another
party to make good a loss , damage, or injury to something of value, as a result of
some uncertain even in which the insured has pecuniary interest.

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History
Early methods
Methods for transferring or distributing risk were practiced
by Chinese and Babylonian traders as long ago as the 3rd and 2nd millenniaBC,
respectively. Chinese merchants travelling treacherous river rapids would redistribute
their wares across many vessels to limit the loss due to any single vessel's capsizing.
The Babylonians developed a system which was recorded in the famous Code of
Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If
a merchant received a loan to fund his shipment, he would pay the lender an
additional sum in exchange for the lender's guarantee to cancel the loan should the
shipment be stolen or lost at sea.
At some point in the 1st millennium BC, the inhabitants of Rhodes created
the 'general average'. This allowed groups of merchants to pay to insure their goods
being shipped together. The collected premiums would be used to reimburse any
merchant whose goods were jettisoned during transport, whether to storm or sinkage.

Modern insurance
Insurance became far more sophisticated in Enlightenment era Europe, and
specialized varieties developed.
Property insurance as we know it today can be traced to the Great Fire of London,
which in 1666 devoured more than 13,000 houses. The devastating effects of the fire
converted the development of insurance "from a matter of convenience into one of
urgency, a change of opinion reflected in Sir Christopher Wren's inclusion of a site
for 'the Insurance Office' in his new plan for London in 1667". A number of
attempted fire insurance schemes came to nothing, but in 1681, economist Nicholas
Barbon and eleven associates established the first fire insurance company, the
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"Insurance Office for Houses", at the back of the Royal Exchange to insure brick and
frame homes. Initially, 5,000 homes were insured by his Insurance Office.
At the same time, the first insurance schemes for
the underwriting of business ventures became available. By the end of the
seventeenth century, London's growing importance as a centre for trade was
increasing demand for marine insurance. In the late 1680s, Edward Lloyd opened a
coffee house, which became the meeting place for parties in the shipping industry
wishing to insure cargoes and ships, and those willing to underwrite such ventures.
These informal beginnings led to the establishment of the insurance market Lloyd's
of London and several related shipping and insurance businesses.
The first life insurance policies were taken out in the early 18th century.
The first company to offer life insurance was the Amicable Society for a Perpetual
Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas
Allen.[7][8] Edward Rowe Mores established the Society for Equitable Assurances on
Lives and Survivorship in 1762.
T=Any risk that can be quantified can potentially be insured. Specific
kinds of risk that may give rise to claims are known as perils. An insurance policy
will set out in detail which perils are covered by the policy and which are not. Below
are non-exhaustive lists of the many different types of insurance that exist. A single
policy may cover risks in one or more of the categories set out below. For
example, vehicle insurance would typically cover both the property risk (theft or
damage to the vehicle) and the liability risk (legal claims arising from an accident).
A home insurance policy in the United States typically includes coverage for damage
to the home and the owner's belongings, certain legal claims against the owner, and
even a small amount of coverage for medical expenses of guests who are injured on
the owner's property.
Business insurance can take a number of different forms, such as the
various kinds of professional liability insurance, also called professional indemnity
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(PI), which are discussed below under that name; and the business owner's
policy (BOP), which packages into one policy many of the kinds of coverage that a
business owner needs, in a way analogous to how homeowners' insurance packages
the coverages that a homeowner needs.

Auto insurance
Auto insurance protects the policyholder against financial loss in the event of
an incident involving a vehicle they own, such as in a traffic collision.
Coverage typically includes:

Property coverage, for damage to or theft of the car

Liability coverage, for the legal responsibility to others for bodily injury or
property damage

Medical coverage, for the cost of treating injuries, rehabilitation and

sometimes lost wages and funeral expenses

Gap insurance
Gap insurance covers the excess amount on your auto loan in an instance
where your insurance company does not cover the entire loan. Depending on the
companies specific policies it might or might not cover the deductible as well. This
coverage is marketed for those who put low down payments, have high interest rates
on their loans, and those with 60 month or longer terms. Gap insurance is typically
offered by your finance company when you first purchase your vehicle. Most auto
insurance companies offer this coverage to consumers as well. If you are unsure if
GAP coverage had been purchased, you should check your vehicle lease or purchase
documentation.

Health Insurance
We understand that people are unique and have varying levels of control over their health.
Each of us would like to define a healthy life on our own terms. At SBI General, its our aim
to partner with you and help you achieve better health and a sense of security along the way.
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In times of rising health care costs, a sudden illness or injury can leave you financially
devastated and highly stressed. With SBI Generals Health Insurance Policy Retail, you
can be in control by making medical treatment expenses more manageable. Thus ensuring
quality health & happiness of your family.

HEALTH INSURANCE

Apollo DKV Health Insurance has renamed itself Apollo Munich Health
Insurance as a part of its five-year strategic plan to gain a five per cent market share.
Apollo Munich is a joint venture between Asias largest integrated healthcare
provider, The Apollo Hospitals Group, and Germany-based Munich Res segment,
Munich Health.

Coverage
This policy covers the following subject to the terms and conditions:

Sr. no.

Expense Heads

Expense Limit(Rs).

Medical Treatment with Up to 1% of the Sum Insured per day

Room, Board & Nursing
Expenses
&
Service
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Charges etc.
2

Medical Treatment
Intensive Care Unit

in Up to 2% of the Sum Insured per day

All admissible claims Up to 25% of the SI per illness/injury

under 1 & 2 during the per claim
policy period

Consultants & Specialists Up to 40% of the SI per illness/injury

Fees
per claim.

Anaesthesia,
Blood, Up to 40% of the SI per illness/injury
Oxygen, OT Charges, per claim.
Surgical Appliances

Pre-hospitalisation

Up to 10% of the eligible

hospitalisation expenses incurred 30
days prior to date of admission into
the hospital.

Post-hospitalisation

Up to 10% of the eligible

hospitalisation expenses incurred 60
days after the date of discharge from
the hospital.

Ambulance charges

1% of SI up to a max of Rs. 1500.

Free Medical Check up

Free medical check-up - 1% of SI up

to a max of Rs. 2500 for every 4 claim
free years.

10

Parental Care: Attendant

nursing charge to take
care of you parents who
are above 60 years of age.

Available for persons above 60 years

old. Attendant nursing charges after
discharge from the hospital for Rs 500
or actual whichever is less per day up
to a max. 10 days per hospitalisation.
The charges can be reimbursed for a
period not exceeding 15 days during
the entire Policy period.

11

Child Care: Attendant Available for child below 10 years.

escort charges to take care Attendant escort charges of Rs 500 for
of child below 10 years of each completed day of hospitalisation
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age.

subject to maximum of 30 days during

the Policy Period.

12

Limit of Cataract

15% of sum insured subject to

maximum of 25000 per eye subject to
first two years exclusion.

13

Accidental Hospitalisation Sum Insured Limit under the policy

shall increase by 25% of the balance
sum insured available subject to max
of Rs.1 Lac. in case of accidental
hospitalisation. Payable only once
under the Policy per person.

14

Alternative
Treatment
(Subject to Treatment
taken at a Ayurvedic
hospital confirming with
our definition of hospital
and which is registered
with any of the local Govt.
bodies)

Reimbursement
of
Ayurvedic
Treatment up to a maximum of 15% of
Sum Insured per Policy period up to a
maximum
of
Rs.
20000
&
Homeopathy and Unani Treatment
upto a maximum 10% of Sum Insured
per Policy period up to a maximum of
Rs. 15000.

15

Domiciliary
Hospitalisation

Reasonable and Customary Charges

towards Domiciliary Hospitalisation
as defined in Policy definition subject
to 20% of the Sum Insured maximum
up to Rs.20000 whichever less is.

16

Convalescence BenefitBenefit
available
for
Insured above 10 years &
below 60 years.

Covers select Day Surgery where less

than 24 hours hospitalisation for
specified procedures like Dialysis,
Chemotherapy, Radio therapy, Eye
Surgery, Dental Surgery (Due to
accident), Tonsillectomy, etc are
covered.

17

Co-Payment
on
all 10% on all eligible admissible claims.
eligible admissible claims
in non-network hospitals

18

Cashless facility

Across SBI
Hospitals
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Coverage for select Day

Surgery procedures where
less than 24 hours
hospitalisation is required.

Covers select Day Surgery where less

than 24 hours hospitalisation for
specified procedures like Dialysis,
Chemotherapy, Radio therapy, Eye
Surgery, Dental Surgery (Due to
accident), Tonsillectomy, etc are
covered.

Accident, sickness, and unemployment insurance

Workers' compensation, or employers' liability insurance, is compulsory in
some countries

Disability insurance policies provide financial support in the event of the

policyholder becoming unable to work because of disabling illness or injury. It
provides monthly support to help pay such obligations as mortgage
loans and credit cards. Short-term and long-term disability policies are available
to individuals, but considering the expense, long-term policies are generally
obtained only by those with at least six-figure incomes, such as doctors, lawyers,
etc. Short-term disability insurance covers a person for a period typically up to six
months, paying a stipend each month to cover medical bills and other necessities.

Long-term disability insurance covers an individual's expenses for the long

term, up until such time as they are considered permanently disabled and
thereafter. Insurance companies will often try to encourage the person back into
employment in preference to and before declaring them unable to work at all and
therefore totally disabled.

Disability overhead insurance allows business owners to cover the overhead

expenses of their business while they are unable to work.

Total permanent disability insurance provides benefits when a person is

permanently disabled and can no longer work in their profession, often taken as
an adjunct to life insurance.

Workers' compensation insurance replaces all or part of a worker's wages lost

and accompanying medical expenses incurred because of a job-related injury.
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Casualty Insurance
Crime insurance is a form of casualty insurance that covers the policyholder against
losses arising from the criminal acts of third parties. For example, a company can
obtain crime insurance to cover losses arising from theft or embezzlement.

Political risk insurance is a form of casualty insurance that can be taken out by
businesses with operations in countries in which there is a risk that revolution or
other politicalconditions could result in a loss.

WHAT IS LIFE INSURANCE ?

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Life insurance may be defined as a contract in which the insurer, in

consideration of a certain premium, either in a lump sum or by other periodical
payments, agrees to pay the assured, or to the person for whose benefit the policy is
taken, the assured sum of money, on the happening of a specified event contingent on
the human life.
Life insurance is a contract under which the insurer (Insurance Company)
in consideration of a premium paid undertakes to pay a fixed sum of money on the
death of the insured or on the expiry of a specified period of time Whichever is
earlier. In case of life insurance, the payment for life insurance policy is certain. The
Event insured against is sure to happen only the time of its happening is not known.
So life insurance is known as Life Assurance. The subject matter of insurance is life
of human being. Life insurance provides risk coverage to the life of a person. On
death of the person insurance offers protection against loss of income and
compensate the titleholders of the policy.

ROLE OF LIFE INSURANCE: Life insurance as an investment:

Insurance products yield more than any other investment instruments and it also
provides added incentives or bonus offered by insurance companies.

Life insurance as risk cover:

Insurance is all about risk cover and protection of life. Insurance provides a unique
sense of security that no other forms of invest can provide.

Life insurance as tax planning:

Insurance serves as an excellent tax saving mechanism too.

IMPORTANCE OF LIFE INSURANCE:

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Protection against untimely death: Life insurance provides protection to

the dependents of the life insured and the family of the assured in case of his
untimely death. The dependents or family members get a fixed sum of money
in case of death of the assured.

Saving for old age: After retirement the earning capacity of a person
reduces. Life insurance enables a person to enjoy peace of mind and a sense of
security in his/her

Promotion of savings: Life insurance encourages people to save money

compulsorily. When life policy is taken, the assured is to pay premiums
regularly to keep the policy in force and he cannot get back the premiums,
only surrender value can be returned to him. In case of surrender of policy, the
policyholder gets the surrendered value only after the expiry of duration of the
policy.

Initiates investments: Life Insurance Corporation encourages and mobilizes

the public savings and canalizes the same in various investments for the
economic development of the country. Life insurance is an important tool for
the mobilization and investment of small savings.

Credit worthiness: Life insurance policy can be used as a security to raise

loans. It improves the credit worthiness of business.
SocialSecurity: Life insurance is important for the society as a whole also.
Life insurance enables a person to provide for education and marriage of
children and for construction of house. It helps a person to make financial
base for future.

Tax Benefit: Under the Income Tax Act, premium paid is allowed as a
deduction from the total income under section 80C.

Various types of life insurance policies

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Endowment policies: This type of policy covers risk for a specified period,
and at the end of the maturity sum assured is paid back to policyholder with
the bonuses during the term of the policy.
Money back policies: This type of policy is for periodic payments of partial
survival benefits during the term of the policy as long as the policy holder is
alive.
Group insurance: This type of insurance offers life insurance protection
under group policies to various groups such as employers employees,
professionals, co-operatives etc it also provides insurance coverage for people
in certain approved occupations at the lowest possible premium cost.
Term life insurance policies: This type of insurance covers risk only
during the selected term period. If the policyholder survives the term, risk
cover comes to an end. These types of policies are for those people who are
unable to pay larger premium required for endowment and whole life policies.
No surrender, loan or paid up values are in such policies.
Whole life insurance policies: This type of policy runs as long as the
policyholder is alive and is covered for the entire life of the policyholder. In
this policy the insured amount and the bonus is payable only to nominee on
the death of policyholder.
Joint life insurance policies: These policies are similar to endowment
policies in maturity benefits and risk cover, but joint life policies cover two
lives simultaneously such as married couples. Sum assured is payable on the
first death and again on the death of survival during the term of the policy.
Pension plan: a pension plan or annuity is an investment over a certain
number of years but does not provide any life insurance cover. It offers a
guaranteed income either for a life or certain period.

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Unit linked insurance plan: ULIP is a kind of insurance plan, which
provides life cover as well as return on premium paid over a certain period of
time. The investment is denoted as units and represented by the value called
as net asset value (NAV).

Different distribution channels in India

A multi-channel strategy is better suited for the Indian market. Indian
insurance market is a combination of multiple markets. Each of the markets requires
a different approach. Apart from geographical spread the sociocultural and economic
segmentation of the market is very wide, exhibiting different traits and needs.
Different multi-distribution channels in India are as follows:
Agents: Agents are the primary channels for distribution of insurance. The
public and private sector insurance companies have their branches in almost
all parts of the country and have attracted local people to become their agents.
Today's insurance agent has to know which product will appeal to the
customer, and also know his competitor's products to be an effective salesman
who can sell his company, the product, and himself to the customer. To the
average customer, every new company is the same. Perceptions about the
public sector companies are also cemented in his mind. So an insurance agent
can play an important role to create a good image of company.
Banks: Banks in India are all pervasive, especially the public sector banks.
Many insurance companies are selling their products through banks.
Companies, which are bank, owned, they are selling their products through
their parent bank. The public sector banks, with their vast branch networks,
are helpful to insurance companies. This channel of selling insurance is known
as Bank assurance.

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INSURANCE COMPANY

ASSOCIATE BANKS

SBI Life

State Bank of India, BNP Paribas

ICICI Prudential

ICICI Bank, Bank of India, Citibank,

Allahabad Bank, Federal Bank, South
Indian Bank, Punjab and Maharashtra
Cooperative Bank

Birla Sun Life

Deutsche Bank, Citibank, Bank of

Rajasthan, Andhra Bank

ING Vysya Bank

Vysya Bank

Aviva Life Insurance

ABN Amro Bank, Canara Bank

HDFC Standard Life

HDFC Bank, Union Bank, Indian

Bank

Met Life

Karnataka Bank, J&K Bank

Source: Hindu Business Line

Brokers: Now a days different financial institution are selling insurance.

These financial institutions are known as brokers. They are taking some
underwriting charges from the insurance companies to sell their insurance
products.
Corporate agents: Corporate agency is a cross selling type of channel.
Insurance companies tie-up with business houses in other industries to sell
insurance either to their employees or their customers. Insurance industry,
during the past 2 years has witnessed a number of such strategic tie-ups and
alliances. Corporate agents have become a major force to reckon with in
distributing insurance products. Such as- Bajaj Allianz tied up with Maruti
Udyog and Ford for auto insurance and Tata AIG life has tied up with Tata

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tea, Khaitans Williamson major and bridge foundation for selling rural
policies.
Internet: In this technological world Internet is also a channel of selling
insurance. This can be as direct marketing.

GENERAL INSURANCE

Insurance of the non-life assets are called general insurance, this includes loss
of asset against water, fire, earthquake etc. With the opening up of the Indian Market in
Insurance sector for private players, in General Insurance the monopoly of the general
Insurance public sectors companies has been broken. With the entrance of the new
private player market innovative technique has been introduced to capture the market. In
general the private players have captured Insurance around 17% of the market.
General Insurance is a sector, which alone has many type of insurance
coverage in it like Fire Insurance, Marine Insurance, motor Insurance, Liability
Insurance, Engineering Insurance etc.

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INSURANCE PROVIDE:

Protection to investor.

Accumulation of savings.

Old age pensions

Tax benefits

Functions of insurance:
Provide Protection: The primary function of insurance is to provide protection
against future risk, accidents and uncertainty. Insurance cannot check the happening
of risk, but can certainly provide for the losses of risk. Insurance is actually a
protection against economic loss, by sharing the risk with others.
Collective bearing of risk: Insurance is an instrument to share the financial loss of
few among many others. Insurance is a mean by which few losses are shared among
larger number of people. All the insured contribute the premiums towards a fund and
out of which the persons exposed to a particular risk is paid.
Assessment of risk: Insurance determines the probable volume of risk by evaluating
various factors that give rise to risk. Risk is the basis for determining the premium
rate also.
Provide certainty: Insurance is a device, which helps to change from uncertainty to
certainty. Insurance is device whereby the uncertain risks may be made more certain.
Small capital to cover larger risk: Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks and
uncertainty.
Contributes

to

wards

the

development

of

industries:

Insurance provides development opportunity to those larger

industries having more risks in their setting up. Even the financial
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institutions may be prepared to give credit to sick industrial units
which have insured their assets including plant and machinery.

Means of savings and investment: Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the unnecessary expenses
by the insured's For the purpose of availing income-tax exemptions also, people
invest in insurance.
Source of earning foreign exchange: Insurance is an international business. The
country can earn foreign exchange by way of issue of marine insurance policies and
various other ways.
Risk free trade: Insurance promotes exports insurance, which makes the foreign
trade risk free with the help of different types of policies under marine insurance
cover.

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INDIAN INSURANCE INDUSTRY HISTORY

The insurance sector in India has completed all the facets of competition
from being an open competitive market to being nationalized and then getting
back to the form of a liberalized market once again. The history of the insurance
sector in India reveals that it has witnessed complete dynamism for the past two
centuries approximately.
Life insurance came to India from England in 1818 when oriental life
insurance company started in Calcutta by Europeans. After this many insurance
companies had been started in India. But these companies were looking after only
the needs of European community established in India. These companies were not
insuring Indian people. First Indian life insurance company came as Bombay
mutual life insurance assurance. Second company was Bharat insurance company
came in 1896. After this the united India in madras, national Indian and national
insurance in Calcutta and the co-operative assurance in Lahore were established in
1906.
To regulate Indian insurance business first insurance act came in 1912 as
life insurance company act and provident fund act. These acts consist of premium
rates tables and periodical valuations of companies. In the first two-decade of 20th
century many life insurance companies were started. So the insurance act came in
1938 to governing life and non life insurance companies and to provide strict state
control.
In 1956 the life insurance business in India was nationalized. In 1956 life
insurance corporation of India (LIC) was created to spreading life insurance much
more widely particularly in rural areas. In that year LIC had 5 zonal offices, 33
divisional offices and 212 branch offices. In 1957 the business of LIC of sum assured
of 200crores, 1000crores in 1970, and 7000crores in 1986.
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Important milestones in the Indian life insurance business:

1912: The Indian Life Assurance Companies Act came into force for
regulating the life insurance business.
1928: The Indian Insurance Companies Act was enacted for enabling the
government to collect statistical information on both life and non-life
insurance businesses.
1938: The earlier legislation consolidated the Insurance Act with the aim of
safeguarding the interests of the insuring public
1956: 245 Indian and foreign insurers and provident societies were taken over
by the central government and they got nationalized. An Act of Parliament,
viz. LIC Act, 1956, formed LIC. It started off with a capital of Rs. 5 crore and
that too from the Government of India.
Important milest ones in the Indian general insurance business:
1907: The Indian Mercantile Insurance Ltd. was set up which was the first
company of its type to transact all general insurance business.
1957: General Insurance Council, an arm of the Insurance Association of
India, framed a code of conduct for guaranteeing fair conduct and sound
business patterns.
1968: The Insurance Act improved for regulating investments and set
minimal solvency levels and the Tariff Advisory Committee was set up.
1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India. It was with effect from
1st January 1973.
107 insurers integrated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was
incorporated as a company.

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INSURANCE REGULATORY DEVELOPMENT

AUTHORITY (IRDA)
In 1999, the Insurance Regulatory and Development Authority
(IRDA) were 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.

ROLEOFIRDA
Protecting the interests of policyholders.
Establishing guidelines for the operations of insurers and brokers.
Specifying the code of conduct, qualifications, and training for insurance
intermediaries and agents.
Promoting efficiency in the conduct of insurance business.
Regulating the investment of funds by insurance companies.
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Specifying the percentage of business to be written by insurers in rural sectors.
Handling disputes between insurers and insurance intermediaries.

Changing face of Indian insurance industry

After the Insurance Regulatory and Development Authority Act have
been passed there has been establishment of many private insurance companies in
India. Previously there was a monopoly business for Life Insurance Corporation of
India (L.I.C.) who was the only life-insurance company for the people till 2000.
L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of
private life insurance companies there is a great competition in Indian market now.
Everyone is trying to capture the fresh market here and penetrate it with aggressive
marketing strategies. Today life-insurance is not only limited up to just life risk
cover and maturity period bonuses but changed to greater return from the
investments. With the introduction of the unit-linked insurance policies these
companies are investing the money in different investment instruments like shares,
bonds, debentures, government and other securities. People are demanding for
higher returns with the life risk cover and private companies are giving 30-40%
average growth per annum. These life-insurance companies have every kind of
policies suiting every need right from financial needs of, marriage, giving birth
and rearing up a child, his education, meeting daily financial needs of life, pension
solutions after retirement. These companies have every aspects and needs of our
life covered along with the death benefit.
In India only 25% of the population has life insurance. So Indian lifeinsurance market is the target market of all the companies who either want to
extend or diversify their business. To tap the Indian market there has been tie-ups
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between the major Indian companies with other International insurance companies
to start up their business. The government of India has set up rules that no foreign
insurance company can set up their business individually here and they have to tie
up with an Indian company and this foreign insurance company can have an
investment of only 24% of the total start-up investment.
Indian insurance industry can be featured by:
Low market penetration.
Ever growing middle class component in population.
Growth of customers interest with an increasing demand for better
insurance products.
Application of information technology for business.
Rebate from government in the form of tax incentives to be insured.
Today, the Indian life insurance industry has more than a dozen private
players, each of which are making strides in raising awareness levels, introducing
innovative products and increasing the penetration of life insurance in the vastly
underinsured country. Several of private insurers have introduced attractive products
to meet the needs of their target customers and in line with their business objectives.
The success of their effort is that they have captured over 28% of premium income in
five years.
The biggest beneficiary of the competition among life insurers has been
the customer. A wide range of products, customer focused service andprofessional
advice has become the mainstay of the industry, and the Indian customers forms
the pivot of each companys strategy. Penetration of life insurance is beginning to
cut across socio-economic classes and attract people who have never purchased
insurance before.
Life insurance is also now being regarded as a versatile financial
planning tool. Apart from the traditional term and saving insurance policies,
industry has seen the entry and growth of unit-linked products. This provides
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market linked returns and is among the most flexible policies available today for
investment. Now products are priced, flexible, and realistic and sustain so people
in better position to understand the risk and benefits of the product and they are
accepting these innovative products.

So it is clear that the face of life insurance in India is changing, but

with the changes come a host of challenges and it is only the credible players with
a long term vision and a robust business strategy that will survive. Whatever the
developments, the future and the opportunities in this industry will surely be
exciting.
The number of companies in Insurance particularly in Life Insurance
has changed drastically now the number is in 22. List of them are mentioned as
below:1. Bajaj Allianz Life Insurance
2. Birla Sun Life Insurance
3. HDFC Standard Life Insurance
4. ICICI Prudential Life Insurance
5. ING Vysya Life Insurance
6. Max New York Life Insurance
7. Met Life Insurance
8. Om Kotak Mahindra Life Insurance
9. SBI Life Insurance
10. TATA AIG Life Insurance
11. Reliance Life Insurance(AMP Sanmar AssuranceCo. Ltd.)
12. Dabur CGU Life Insurance
13. AVIVA Life Insurance
14. Sahara Life Insurance
15. Shriram Life Insurance
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16. Bharti AXA Life Insurance
17. Future Generali Life
18. IDBI Forlis Life Insurance
19. Canara HSBC Oriental Bank Of Commerce
20. AEGON Religare Life Insurance
21. DLF Parameria Life Insurance
22. Star Union Dai-ichi Life Insurance

Possibilities for insurance companies in India

Further deregulation of the market.
Greater concern for the customers.
Newer products and services.
Competition and quality consciousness.
Cost effective operations.
Restructuring of the public sector.
Consolidation of domestic insurance markets. Technology driven shift
in product design.
Actual operations and distribution.
Convergence of financial services.

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OBJECTIVES

1. Proper understanding and analysis of life insurance industry.

2. To know about brand awareness of SBI Life Insurance and customers
preference about SBI Life Insurance.
3. Conduct market survey on a sample selected from the entire population and
derive opinion on that research.
4. To offer suggestions based upon findings.
5. To highlight historical background of Life insurance
6. To examine the funds income and position of the Life insurance business of
SBI life
7. To analyse the need of customers according to they are financial and age status
8. To provide interpretations and solutions to satisfy the need of customers.
9. To study the various insurance plans of SBI life and suggest an appropriate
plan to the customer.
10. To conduct a need survey to know the openions of the customers from the
market segment.

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COMPANY PROFILE
SBI Life Insurance Company Ltd
SBI Life Insurance is a joint venture between State Bank of India and
BNP Paribas Assurance SBI owns 74% of the total capital and BNP Paribas
Assurance the remaining 26%. SBI Life Insurance has an authorized capital of
Rs.2,000 crore and a paid up capital of Rs.1,000 crore. State Bank of India enjoys
the largest banking franchise in India. Along with its 6 Associate Banks, State Bank
Group has the unrivalled strength of over 16,000 branches across the country,
arguably the largest in the world. BNP Paribas is the 1st largest French company
and ranks 5th in the banking industry worldwide, 1st bank in Euro Zone as per
Global 2000 Forbes 2008. It is 6th most valuable international banking brand as
per Brand Finance 2008.
BNP Paribas Assurance is the insurance arm of BNP Paribas - Euro
Zones leading Bank. BNP Paribas, part of the worlds top 10 groups of banks by
market value and part of Europe top 3 banking companies, is one of the oldest
foreign banks with a presence in India dating back to 1860. BNP Paribas Assurance
is the fourth largest life insurance company in France, and a worldwide leader in
Creditor insurance products offering protection to over 50 million clients. BNP
Paribas Assurance operates in 41 countries mainly through the Bancassurance and
partnership model.

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Multi-distribution Model
SBI Life has a unique multi-distribution model encompassing vibrant
Bancassurance, Retail Agency, Institutional Alliances and Corporate Solutions
distribution channels.
SBI Life extensively leverages the State Bank Group relationship as a
platform for cross-selling insurance products along with its numerous banking product
packages such as housing loans and personal loans. SBIs access to over 100 million
accounts across the country provides a vibrant base for insurance penetration across
every region and economic strata in the country, thus ensuring true financial inclusion.
Agency Channel, comprising of the most productive force of over 68,000 Insurance
Advisors, offers door-to-door insurance solutions to customers.

OUR COMMITMENT

US Roy (MD&CEO)
SBI Life Insurance Co.Ltd.
Our company, with its unique brand and highly committed workforce, is
determined to increase life insurance penetration and offer need-based solutions our
citizens, enabling them to live life to the fullest.
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I invite you to explore the several possibilities available for being an
integral part of this dream, of one of the fastest growing life insurance companies
in the country.

For customers, SBI Life a company of State Bank Group which is

synonymous with trust for more than 200 years presents security for you and your
loved ones through its range of innovative life insurance solutions. With the
backing of the largest distribution network in the country of over 14,500 bank
branches of State Bank and nearly 200 full-service offices of the company, you are
always close to your trusted life insurer.
For prospective business partners, by associating with one of the largest
financial brands in the country, SBI Life gives you a lucrative business opportunity to
profit from serving millions of Indians. In terms of career opportunities, SBI Life
presents its most valuable asset, its employees, a work environment which is a blend
of security and excellence.

We seek opportunities to give qualified minority suppliers a chance to succeed. It

benefits SBI LIFE and our communities.
US Roy(MD&CEO )
SBI LIFE Insurance Co.Ltd

OurMission:
"To emerge as the leading company offering a comprehensive range
of life insurance and pension products at competitive prices, ensuring high
standards of customer satisfaction and world class operating efficiency, and
become a model life insurance company in India in the post liberalization
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period".

Our Values

Trust worthiness

Ambition

Innovation

Dynamism

Excellence

Key Milestones
Financial Year 08-09:
Bagged the coveted personal finance award-Outlook Money NDTV Profit
best Life Insurer 2008.
Ranked among global top three in terms of number of Million Dollar Round
Table (MDRT) members.
CRISIL has reaffirmed its highest financial rating AAA/Stable to SBI Life. In
2007 SBI Life became the first life insurer in India to receive this rating from
CRISIL, countrys leading rating agency.
Recently ICRA has assigned iAAA rating indicating highest claims paying
ability to SBI Life Insurance.
Retains ISO 9001:2000 certificate for superior claim settlement process.

Financial Year 07-08:

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Rated as the The Most Trusted Private Life Insurer according to a survey
conducted by Brand Equity in association with AC Nielsen ORG-MARG and
the Economic Times Intelligence Bureau.
Became first life insurer in India to receive the highest financial rating AAA
from CRISIL, the countries best known rating agency in 2007.
Ranked amongst global top five life insurance companies in the number of
MDRT members.
Forayed into micro insurance with the launch of Grameen Shakti in
Bhubaneswar, Orissa for the economically underprivileged sections of society.
Received ISO 9001: 2000 certification for superior claim settlement process.

Became the only domestic life insurer to achieve CMMI Level 3 certification
for IT processes and software development capabilities.

Financial Year 06-07:

Second consecutive year of Profitability.
Leads Private Life Insurance Companies in Lives covered: 6.49
Million lives covered.

Financial Year 05-06:

Becomes the first Life Insurer to make Profits.

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BRANCHES OF SBI LIFE INSURANCE

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PRODUCT PROFILE
UNIT LINKED PRODUCTS
Horizon 11
Unit plus11
Unit plus child plan
Unit Plan Elite
Smart Ulip

PENSION PRODUCTS
Horizon 11 Pension
Unit Plus 11 Pensions
Life long Pension
Immediate Annuity
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MONEY BACK SCHEME PRODUCTS

Money Back
Sanjeevan Supreme

PURE PROTECTION PRODUCTS

Swadhan
Shield
Keyman

PROTECTION CUM SAVINGS PRODUCTS

Sudarshan
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Scholarll
Setubandhan

GROUP EMPLOYEE BENEFIT PRODUCTS

RETIREMENT SOLUTIONS
Cap Assure Gratuity
Cap Assure Super annuation
Cap Assure Leave Encashment
Group Immediate Annuity
SBI Life Golden Gratuity

PROTECTION PLAN
Sampoorn Suraksha
SBI Life Group Term Life Scheme In Lieu of EDLI

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SPECIALIZED TERM INSURANCE

SBI Life Keyman Insurance

GROUP LOAN PROTECTION PRODUCTS

DHANA RAKSHA PLUS

Dhana raksha Plus SP
Dhana raksha plus LPPT
Dhana raksha plus RP

GROUP SAVINGS PROTECTION PLAN

Nidhi Raksha RP

GROUP MICRO INSURANCE

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Grameen Shakti and Super Suraksh

RESEARCH METHODOLOGY
COLLECTION OF DATA
Data constitutes the subject matter of analysis. One cannot draw inferences
without analyzing data. The relevance, adequacy and reliability of data determine
the quality of the study. Data is primarily of two kinds -

1. Primary data
2. Secondary data

1. Primary data
The primary data are data, which are being collected by the
researcher for the specific purpose of answering the problem on hand. Individual
respondents, doctors, lecturers, jewelers, saloons were personally visited and
interviewed. They were the main source of Primary data. The method of collection of
primary data was direct personal interview through a structured questionnaire.

2. Secondary data
Literature study and the articles are obtaining secondary data from
the Internet. The secondary data was collected on the basis of organizational file,

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official records, news papers, magazines, management books, preserved information
in the companys database and website of the company.

SAMPLING PROCEDURE

Sampling methods

Probability sampling
sampling

Non-probability

1. Simple random method

1. Accidental sampling

2. Systematic sampling

2. Voluntary sampling

3. Stratified sampling
sampling

3. Purposive

4. Cluster sampling

4. Quota sampling

5. Multi-stage sampling

5. Convenience sampling

Convenience sampling
It is used in exploratory research where the researcher is interested in
getting an inexpensive approximation of the truth. As the name implies, the sample is
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selected because they are convenient. This non-probability method is often used
during preliminary research efforts to get a gross estimate of the results, without
incurring the cost or time required to select a random sample.

SAMPLE DESIGN
A procedure or plan drawn up before any data is collected to obtain a
sample from a given population. It is also known as sampling plan or survey design.

DATA ANALYSIS AND INTERPRETATION

Q1. Are you aware about SBI Life Insurance?

80%
70%
60%
50%

75%

40%
30%
25%

20%
10%
0%
Aware

Not Aware

75% people aware about SBI Life Insurance.

25% people not aware about SBI Life Insurance.
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Q2. Do you have any account in SBI Bank?

30%
Have
Don't Have
70%

30% people have account in SBI Bank.

70% people dont have account in SBI Bank.

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Q3(A). Do you have any investment plans of SBI Life Insurance?

70%
60%
50%
40%
30%
20%
10%
0%

37%
Have

63%
Don't Have

37% people have investment plans of SBI Life Insurance like Unit
Plus III,Smart ULIP, Pension Plan and Child Plan.
63% people not have investment plans of SBI Life Insurance.

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Q 3(B). Are you satisfied with the plans of SBI Life?

17%

SATISFIED
NOT SATISFIED

83%

83% people are satisfied with the plans of SBI Life due to Effective
services, Guarantee, good brand image,nice features,attractive
plans, etc.
17% people are not satisfied with the plans of SBI Life due to block
of money.

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4. Have you invested in any other life insurance company other than SBI
Life?

80%
70%
60%
50%

80%

40%
30%
20%

20%

10%
0%
INVESTED

NOT INVESTED

80% people have already invested in other Life Insurance company

like LIC, ICICI, Reliance Life Insurance, Bajaj Life Insurance and
Birla Life Insurance.
20% people not invested in any other Life insurance company.
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5. Do you want to take any investment plan of SBI Life if you find it
better?

90% 87%
80%
70%
60%
50%
40%
30%
20%
10%
0%
YES

13%
NO

87% people want to take investment plan of SBI Life when they
find it better.

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13% people dont want to take investment plan of SBI Life even
when they find it better.

6. What do you think are the benefits of Life Insurance?

67%
70%
60%
50%
40%
30%
20%
10%
0%

17%

13%

3%

17% People thought that Covers future uncertainty is the benefit of

Life Insurance.
13% People thought Tax Saving as benefit of Life Insurance.
3% People thought Investment as benefit of Life Insurance.
67% People thought all the above as benefit of Life Insurance.
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7. Which feature of Life Insurance policy will you consider while buying?

14%
PREMIUM
GUARENTEE
14%

RETURNS
BRAND IMAGE
ALL

66%

6%

0% people judge investment plans with premium.

14% people judge investment plans with Guarantee.
14% people judge investment plans with Returns.
6% people judge investment plans with Brand Image.
66% people judge investment plans with above all features.

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8. According to you, what is the right age to buy insurance?

6%
17%

10%
<25 years

17%

25-35 years
50%

35-45 years
>45 years
Any time

10% People thought less than 25 years is the right age to buy

insurance.
50% People thought 25 35 years is the right age.
17% People thought 35- 45 years is the right age
17% People thought > 45 years is the right age.
6% People thought one can buy insurance at Anytime.

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comparison icici prudential cash back plan vs sbi life insurance

money back

ICICI Prudential Life Insurance Co. Ltd

ICICI Prudential Life Insurance Company is a leading life
insurance company of India. The company was formed after a joint
venture between ICICI Bank and Prudential plc, a financial services...
Life Insurance: MoneyBack Plan : Cash Back
Life Insurance: Protection Plan : Home Assure Loan cover
term insurance, Life Guard Return of Premium, Life Guard
Single Premium
Life Insurance: Retirement Plan : Forever Life, Premier
Life Pension, Life Stage Pension, Life Time Super
Pension, Immediate Annuity
Life Insurance: ULIP Plan : InvestShield Life
New, LifeTime Gold , LifeStage RP , InvestShield
CashBak, LifeLink Super , LifeStage Assure , PremierLife
Gold
Life Insurance: Children Plan : SmartKid New Unitlinked, SmartKid Regular Premium
Life Insurance: Investment Plan : Save n Protect

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SBI Life Insurance Co. Ltd

SBI Life Insurance is one of the leading life insurers in India. It
is a joint venture between the State Bank of India (SBI) and BNP
Paribas Assurance based in France. SBI owns 74% of the total...
Life Insurance: MoneyBack Plan : SBI - Money Back, Sbi
Life - Sanjeevan Supreme
Life Insurance: Children Plan : SBI Life - Unit Plus Child
Plan, SBI Life - Scholar II
Life Insurance: ULIP Plan : SBI Life - Unit Plus Elite
Plan , SBI Life - Horizon II , SBI Life - Unit Plus II
Life Insurance: Investment Plan : SBI Life - Sudarshan
(Endowment)
Life Insurance: Retirement Plan : SBI Life - Unit Plus
II, SBI Life - Horizon II, SBI Life - Immediate
Annuity, SBI Life - Lifelong Pensions
Life Insurance: Protection Plan : SBI Shield, SBI Swadhan

CONCLUSION

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During the data collected, it has been found that people have great awareness
about SBI Life Insurance.
People are beginning to look beyond LIC for their insurance needs and are
willing to trust private players with their hard earned money.
People in general have been influenced by the marketing activities of
insurance companies. A high penetration of print, radio and TV ad campaigns over
the years is beginning to have its impact now.
Another important trend was in terms of people viewing insurance as a tax
saving and investment instrument as much as protective one.
The general satisfaction levels among public with regards to policy and agents
still requires improvement. Here lies the opportunity for a relatively new comer like
SBI Life Insurance. LIC has never been known for prompt service or customer
oriented methods but SBI Life Insurance can build its reputation based on these
factors.
37% out of 75% people those who are aware about SBI Life Insurance have
investment plans of it.
25% people not aware about SBI Life Insurance, hence they invested in other
Life Insurance Company.
83% out of 37% people those who have SBI Life Insurance investment plans
are very satisfied with these plans because of good services, returns, guarantee, brand
image, premium, nice features, attractive plans etc.
70% of the people those who dont have account in SBI Bank think that they
cant take investment plans of SBI Life Isurance.
67% People thought that Covers future uncertainty, tax saving and
investment are some of the benefits of Life Insurance

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People are interested in those plans that give maximum profit in short term.

SUGGESTIONS & RECOMMENDATIONS

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Marketing in terms of the media via advertisements on Television to small

commercials on FM, hoardings and signage etc. has to be made because there

were respondents who havent even heard about SBI Life Insurance.
Awareness camp for sub-urban area should be focused.
State and Central Government employees should be targeted because of reasons
like:
They dont have Life Insurance cover other than that provided by their

respective employers and LIC.

Most of them are underinsured.
They have a stable source of income and social security.
SBI Life Insurance must build its reputation by focusing on service quality. Better

service quality. Better service quality may be in the form:

Issuing policy in time.
Providing claims in time.
Making customers aware about their status of policy.
SBI Life Insurance must introduce such kind of policies which will give
maximum profits in short term period.

WEBLOGRAPHY

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WEBSITES
www.sbilifeinsurance.com
www.sbibank.com

ANNEXURE
QUESTIONNAIRE
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To find out the perception of the persons about SBI

Life Insurance
Dear Respondent
We the student of BNN college, are conducting an analysis on SBI Life
Insurance plans and products. We were highly appreciated and also will be thankful if
you could help us by providing your valuable remarks on following questions.
We assure you of confidentiality of the input you provide to us.

Name of Respondent: __________________________________________

Age: _________________________________________________________
Address: ____________________________________________________
Contact No.: __________________________________________________
Q 1. Are you aware about SBI Life Insurance?
Yes

NO

Q 2. Do you have any account in SBI Bank?

Yes

NO

Q 3(A). Do you have any investment plans of SBI Life Insurance?

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Yes

NO

If yes then mention the plan name:

Q 3(B). Are you satisfied with the plans of SBI Life?

Yes

NO

If yes then why?

______________________________________________________________

Q 4. Have you invested in any other life insurance company other than SBI
Life?
Yes

NO

If yes then mention the company name:

Q 5. Do you want to take any investment plan of SBI Life if you find it
Better?
Yes

NO

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Q 6. What do you think are the benefits of Life Insurance?

Covers future uncertainty

Tax Savings

Investments

All

Q 7. Which feature of Life Insurance policy will you consider while

buying?
Premium

Guarantee

Returns

Brand Name

All

Q 8. According to you, what is the right age to buy insurance?

< 25 Years

25-30 Years

35-45 Years

> 45 Years

Any Time

Q 9. Feedback & Suggestions for SBI Life?

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__________________________________________________________________
__________________________________________________________________________

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