Table of Contents

SL. No. 1 2 3 4 5 6 7 8 9 10

Chapter Introduction Need of study Research Methodology Life Insurance Industry Life Insurance Corporation of India Various policies Under Life Insurance Norms of IRDA Comparative Study of Various policies Conclusion Bibliography

INSURANCE Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed of money on the happening of a certain event. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premium collected from the insuring public and the insurance companies act as trustee to the amount collected. For Example, in a Life policy, by paying a premium to insurer, the family of the insured person receives a fixed compensation on the death of the insured. Similarly in car insurance in the event of car meeting with an accident, the insured receives the compensation to the extent of damage. It is the system by which the losses suffered by a few are spread over many, exposed to similar risks.

Need of the study The life of a person is the most precious thing in the world. His life is associated with the life of various other people also including family members.Every one wants to earn more and more so that their dependents should live a good life. There are various Insurance companies which are not only covering the life of a person but also provide various investment opportunities.

The basic objective of this project: 1. To understand various policies offered by these companies 2. Comparative analysis of various policies provided by LIC and other private companies

Research Methodology My study is related to the insurance sector. So first of all I need to understand the infrastructure of Insurance industry. Type of Research Exploratory Research Data Collection Method Secondary Data : Various insurance magazines Newspaper Internet Economic Times

LIFE INSURANCE

Life insurance made its debut in India well over 100 years ago. Its salient features are not as widely understood in our country as they ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC. It should, however, be clearly understood that the following narration is by no means an exhaustive description of the terms and conditions of a LIC policy or its benefits or privileges. For more details, please contact our Branch or Divisional Office. Any LIC Agent will be glad to help you choose the life insurance plan to meet your needs and render policy servicing. What is Life Insurance Life Insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the Corporation by the assured. Life insurance is universally acknowledged to be an

institution which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilisation's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person: that of dying prematurely leaving a dependent family to visible means of support. Why is it superior to other forms of Savings Protection: Savings through life insurance guarantee full protection against risk of death of the saver. In life insurance, on death, the full sum assured is payable (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable . Aid to thrift: Life insurance encourages 'thrift'. Long term saving can be made in a relatively 'painless' manner because of the 'easy instalment' facility built into the scheme (method of paying premium either monthly, quarterly, half yearly or yearly). Take, for example, our Salary Saving Scheme popularly known as SSS. This scheme provides a convenient method of paying premium each month by deduction from one's salary. The deducted premium is remitted by the employer to the LIC. The Salary Saving Scheme can be introduced in an institution or establishment subject to specified terms and conditions.

Liquidity: Loans can be raised on the sole security of a policy which has acquired loan value. Besides, a life insurance policy is also generally accepted as security for even a commercial loan. Tax Relief: Tax relief in Income Tax and Wealth Tax is available for amounts paid by way of premium for life insurance subject to Income Tax rates in force. Assessees can avail themselves of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for his insurance than he would have to pay otherwise. Money when you need it: A suitable insurance plan or a combination of different plans can be taken out to meet specific needs that are likely to arise in future, such as children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time. Alternatively, policy moneys can be so arranged fend for itself and that of living to old age without

to be made available at the time of one's retirement from service to be used for any specific purpose, such as for the purchase of a house or for other investments. Subject to certain conditions, loans are granted to policyholders for house building or for purchase of flats. Who can buy a Life Insurance Policy ? Any person who has attained majority and is eligible to enter into a valid contract can take out a life insurance policy for himself and on those in whom he has insurable interest. Policies can also be taken

out, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, factors such as the state of health of the life to be assured, the proponent's income and other relevant factors are considered by the Corporation. Insurance on Women . Prior to nationalization (1956), many of the private insurance companies used to offer insurance to female lives with some extra premium or on restrictive conditions. After nationalization of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time to time. At present, women with earned income are treated on par with male lives. In other cases, a restrictive clause is imposed and that too only if age of the female is up to 30 years and if she does not have an income attracting Income Tax. Medical and Non-Medical Schemes . Life insurance is normally offered after a medical examination of the life to be assured. However, to facilitate greater spread of insurance and also as a measure of relaxation, LIC has been extending insurance cover without any medical examination, subject to certain conditions.

With Profit and Without Profit Plans . An insurance policy can be 'with' or 'without'profit. In the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable alongwith the contracted amount. In 'without' profit plan the contracted amount is paid without any addition. The premium rate charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.
Keyman Insurance .

Keyman Insurance is taken by a business firm on the life of key employee(s) to project the firm against the finance loss which may occur due to the premature demise of the keyman insurance.

Players of life insurance in India 1. LIC 2.Private players

OBJECTIVE OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment.

Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy.

MISSION

Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development

VISION
A trans-nationally competitive financial conglomerate of significance to societies and Pride of India" -

PRODUCTS IN LIFE INSURANCE

Whole life policy: These are low-cost insurance plans where the sum assured is payable on the death of the insured. A typical whole life policy runs as long as the policyholder is alive. In other words, the risk is covered for the entire life of the policyholder, which is why it is known as whole life policies. The policy money and the bonus are payable only to the nominee of the beneficiary upon the death of the policyholder. The policyholder is not entitled to any money during his or her own lifetime, i.e. there is no survival benefit. Whole life policies are fairly rigid and inflexible and are suitable only in a few, very specific cases. Whole Life Policy can be a good initial policy to buy since its cost is very low. That is an important consideration when
one is just starting a career. Endowment policy: Under these plans, the sum assured is pay-able on the maturity of the policy or in case of death of the insured individual before maturity of the policy. Endowment policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with the entire bonus accumulated during the term of the policy. It is this feature - the payment of the

endowment to the policyholder upon the completion of the policys term -, which rightly accounts for the popularity of endowment policies. The original sum assured and the accumulated bonus received back comes handy from the endowment can either be used for buying an annuity policy to generate a monthly pension for the whole life, or put it in any other suitable investment of his choice.

As compared to whole life policies, the premium rates for endowment policies are higher and the bonus rates lower. On the plus side, these polices offer an endowment - representing a return on his premium payments payable to him in his own lifetime when the policy comes to an end. Money back policy: Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money back policies provide for periodic payments of partial survival benefits during the term of the policy, of course so long as the policy holder is alive. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money-back components. Similarly, the bonus is also calculated on the full sum assured. Under money back policies premiums can be paid as per the insurance companys policy. These could be quarterly, half yearly or annually. The premiums for these policies are payable for the selected term of years, or till death if it occurs earlier. By buying such policies one can receive income at regular intervals other than the risk cover it provides. Also a good amount of bonus on the full sum assured is quite a good bargain

Term policy: Under these plans, the sum assured is payable only on the death of the insured individual before expiry of the policy.Term policies, cover only the risk during the selected term period. If the policyholder survives the term, the risk cover comes to an end.A Term plan is designed to meet the needs of people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy, but they hope to be able to pay for such a policy in the near future. No surrender, loan or paid-up values are granted under these policies because reserves are not accumulated. If the premium is not paid with the days of grace, the policy will lapse without acquiring a paid-up value. However, a lapsed policy may be revived during the lifetime of the life assured but before the expiry of the period of two years from the due date of the first unpaid premium on the usual terms. Accident and / or Disability benefits are not granted on policies under the Term plan. Annuity (Pension Plan): These plans provide for either immediate or deferred pension for life. The pension payments are made till the death of the annuitant (per-son who has a pension plan) unless the policy has provision of guaranteed period. An annuity is an investment that one make, either in a single lump sum or through installments paid over a certain number of years, in return for which one receive back a specific sum every year, every half-year or every month, either for life or for a fixed number of years. After the death of the annuitant, or after the fixed annuity period expires for annuity payments, the invested annuity fund is refunded, perhaps along with

a small addition, calculated at that time. Annuities differ from all the other forms of life insurance discussed so far in one fundamental way - an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period. Typically annuities are bought to generate income during ones retired life, which is why they are also called pension plans. Annuity premiums and payments are fixed with reference to the duration of human life. Joint life policy: Joint life policies are similar to endowment policies in as much as these policies also offer maturity benefits to the policyholders, apart form covering the risks as all life insurance policies. But these are categorized separately as these cover two lives together thus offering a unique advantage in some cases; notable, for a married couple or for partners in a business firm. Under a joint life policy the sum assured is payable on the first death and again on the death of the survivor during the term of the policy. Vested bonuses would also be paid besides the sum assured after the death of the survivor. If one or both the lives survive to the maturity date, the sum assured as well as the vested bonuses are payable on the maturity date.The premiums payable cease on the first death or on the expiry of the selected term, whichever is earlier. Accident benefits equivalent to the sum assured are available under this plan on the first death. However, if both lives are covered under Double Accident Benefit (DAB), the surviving life is

covered under DAB until the end of the policy year, in which the first life dies under the cover of the policy. These benefits are available with respect to both lives if Both lives perish simultaneously owing to an accident. To avoid such an eventuality, nomination is allowed under the policy OR Both die within the specified period as a result of the same accident OR The second life also dies in the same policy year as result of another accident. To avoid such an eventuality, nomination is allowed under the policy. Particularly for couples - Joint life policies provide dual-purpose income and risk protection for both belonging to every income group and class of society. Under a joint life plan though the premium payment stops after the first life's death, bonuses continue to accrue on the basic Sum Assured till Maturity Date or till the death of the second life, if earlier. Group insurance: Group Insurance offers life insurance protection under group policies to various groups such as employer-employee, professionals, cooperatives, weaker sections of society etc. It also provides insurance coverage to people under certain approved occupations at the lowest possible premium cost. Besides providing insurance coverage, it also offers group schemes to employers, which provide funding of gratuity and pension liabilities of the employers Group insurance plans have low premiums. Such plans are particularly beneficial to those for

whom other regular policies are a costlier proposition. Group insurance plans extend cover to large segments of the population including those who cannot afford individual insurance. As such the premia one need to pay is comparatively lower and at the same time one can avail of insurance benefits. The main features of the schemes are low premium and simple insurability conditions. Premiums are based upon age combination of members, occupation and working conditions of the group. A number of group insurance schemes have been designed for various groups. These include employer-employee groups, associations of professionals (such as doctors, lawyers, chartered accountants etc.), and members of cooperative banks, welfare funds, credit societies and weaker sections of society. Creditor-Debtor groups are also offered group insurance schemes. Group insurance schemes providing uniform cover can be granted to outstanding loans. These groups are Members of primary housing societies where housing loans are granted by State Apex housing societies, borrowers granted loans by Institutional agencies in Public/Joint Sectors for housing purposes and borrower members of cooperative societies/banks formed by employees of the same employers Special plan: Special plans are insurance policy plans available from the national insurance providers to serve the needs of citizens that cannot be commonly classified or segregated. These special plans are designed to satisfy needs ranging from debt-clearance in event of the death of the insured to financial aid in the event of a medical mishap. Special

plans also provide financial assistance for handicapped dependants as well as emergency surgery required if and when a medical condition arises. Since special plans are designed for people with diverse and specific needs, the average citizen may not necessarily need or use them. Yet, in the normal course of life, situations may arise when one may need to provide for unplanned or unexpected contingencies and mishaps.

The Likely Private Players

A number of foreign Insurance companies have set up representative office in India and have also tied up with various asset management companies. They have either signed Memorandum of Understanding with Indian companies or are trying to do the same. A few of them have been around for the last four to five years. Some have carried out extensive research on the Indian Insurance sector. Others have set up liaison offices. All of them are waiting with bated breathe for the opening up of the sector and taking a bite of the great Indian Insurance pie.

The following tie-ups are already in place: INDIAN PARTNER Alpic Finance Tata CK Birla Group ICICI Sundaram Finance Hindustan Times Ranbaxy HDFC Bombay Dyeing DCM Shriram Dabur Group Kotak Mahindra Godrej Sanmar Group Cholamandalam SK Modi Group 20th Century Finance M A Chidambaram INTERNATIONAL PATRNER Allianz Holding, Germany American Int. Group, US Zurich Insurance, Switzerland Prudential, UK Winterthur Switzerland Commercial Union, UK Cigna, US Standard Life, UK General Accident, UK Royal Sun Alliance, UK Liberty Mutual Fund, US Chubb, US J Rothschild, UK Gio, Australia Guardian Royal Exchange, UK Legal & General, Australia Canada Life Met Life Insurance,

Vysya Bank

ING

Company Profile Private Players 1. BIRLA SUN LIFE INSURANCE COMPANY LIMITED

The Aditya Birla Group Aditya Birla Group is India's second largest business house, with a turnover of over $4.75bn and an asset base of $3.8 bn. The Group is a well diversified conglomerate with 72,000

strong workforce spanning 40 Companies spread across 17 countries. The flagship companies of the Group - Grasim, Hindalco, Indian Rayon and Indo Gulf - hold leadership positions in their respective areas of business.

Sun Life Assurance Sun Life Assurance Co. of Canada, established in 1871, is licensed in Canada, the U.S., the Philippines, Hong Kong, and the U.K. Its major lines of business are life insurance, annuities and mutual funds and investment services. Sun Life's rating reflects extremely strong diversification of revenues and profitability, outstanding capitalization, good fundamental earnings, and high-quality investments. In Canada, the company is especially strong in the corporate life and health insurance and savings markets. In the U.S., the company is a top 20 player in the variable annuity market and a significant force in the upscale individual insurance market. In the U.K., Sun Life is among top 20 life and health insurers.

The Joint Venture Birla Sun Life Insurance Company, the 74: 26 joint venture between Aditya Birla Group and Sun Life financial Services of Canada, has an equity capital of Rs. 150 crore. The area of focus will be the rural segment as the company plans to leverage the network of the Aditya Birla Centre for Community Initiative and Rural Development in rural areas. Its multi-channel distribution set up comprises insurance advisors for life and an expert marketing team for group products.

Birla Sun Life Insurance Products

Money Back Endowment Whole Life Biral Sun Life Term Plan ALLIANZ BAJAJ LIFE INSURANCE COMPANY

2.

LIMITED Bajaj Auto Ltd. Bajaj Auto Ltd the flagship company of Bajaj Group was incorporated in 1945 as Bachraj Trading Corporation.

Initially it started by assembling two and three wheelers in collaboration with Piaggio of Italy. After the expiry of the agreement in 1971 the two and three wheelers acquired the brand name of Bajaj. The strength of the company lies in its strong brand image and ability to offer value for money products leveraging on its large-scale operations. Bajaj is one of India's largest two and three - wheeler manufacturer and the fourth largest manufacturer of twowheeler in the world, with an annual turnover of Rs. 42.16 billion. Allianz AG Allianz group was founded in 1890 and is one of the world's leading insurance companies with over 100 years' experience in insurance and related services. It is also the largest insurer in Europe. Allianz group has multi-local structure and presence in over 70 countries. The key business areas of Allianz group include General Insurance (property, engineering, marine, Risk motor, casualty and & miscellaneous), Management. Cornhill Insurance in the United Kingdom, Fireman's Fund in the United States of America, AGF in France, RAS s.p.a in Italy, MMI in Australia are some companies under Allianz Reinsurance, Management, Life

health insurance, Asset Management and Pension Funds

group. Rated 'AAA' by S&P it has assets over 670 billion DM (Rs. 17,160 billion) under its management with employee strength of over 1,05,700. The Joint Venture Allianz Bajaj Life Insurance Co. Ltd. company is a joint venture between Allianz AG and Bajaj Auto Limited. Characterized by global presence with a local focus and driven by customer orientation to establish high earnings potential and financial strength, Allianz Bajaj Life Insurance Co. Ltd. was incorporated on 12th March 2001. The company received the Insurance Regulatory and Development Authority (IRDA) Certificate of Registration (R3) No 116 on 3rd August 2001 to

Allianz Bajaj Insurance Products

Risk Care Term Care Cash Care

Save Care Life Term

3.

HDFC

STANDARD

LIFE

INSURANCE

COMPANY

LIMITED HDFC Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 119 crores. The net worth of the corporation as on March 31, 2000 stood at Rs. 2,096 crores. HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai, India. HDFC also has an international office in Dubai, U.A.E., with service associates in Kuwait, Oman and Qatar. Standard Life Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 175 years, is a modern company surviving quite a few changes since selling its first policy in 1825. The company expanded in the 19th century from its

original Edinburgh premises, opening offices in other towns and acquiring other similar businesses. Standard Life currently has assets exeeding over 70 billion under its management and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor. The Joint Venture HDFC Standard Life Insurance Company Limited was one of the first companies to be granted licence by the IRDA to operate in life insurance sector. Each of the JV player is highly rated and been conferred with many awards. HDFC is rated 'AAA' by both CRISIL and ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and Standard and Poors. These reflect the efficiency with which HDFC and Standard Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively. HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000. HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and Standard Life has a stake of 18.6%. 4. ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI ICICI Ltd., was established in 1955 by the World Bank, the Government of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian industry. Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the major sectors of the economy, covering 6,848 companies and 16,851 projects. As of March 31, 2000, ICICI had disbursed a total of Rs. 1,13,070 crores, since inception. Prudential plc. Prudential plc. was founded in 1848. Since then it has grown to become one of the largest providers of a wide range of savings products for the individual including life insurance, pensions, annuities, unit trusts and personal banking. It has a presence in over 15 countries, and caters to the financial needs of over 10 million customers. It manages assets of over US$ 259 billion (Rupees 11,39,600 crores approx.) as of December 31, 1999. Prudential is the largest life insurance company in the United Kingdom (Source : S&P's UK Life Financial Digest, 1998).

Asia has always been an important region for Prudential and it has had a presence in Asia for over 75 years. In fact Prudential's first overseas operation was in India, way back in 1923 to establish Life and General Branch agencies. The Joint Venture ICICI Prudential Life Insurance Company Limited was

incorporated on July 20, 2000. The authorized capital of the company is Rs.2300 Million and the paid up capital is Rs. 1500 Million. The Company is a joint venture of ICICI (74%) and Prudential plc UK (26%). The Company was granted Certificate of Registration for carrying out Life Insurance business, by the Insurance Regulatory and Development Authority on November 24, 2000. It commenced commercial operations on December 19, 2000, becoming one of the first few private sector players to enter the liberalized arena. ICICI Pru Life Insurance Products

ICICI Pru Forever Life ICICI Pru Single Premium Bond ICICI Save 'n' Protect ICICI Pru CashBak ICICI Pru Life Gaurd

ICICI Pru Assure Investment ICICI Pru Life Link ICICI Pru ReAssure

5.

ING

VYSYA

LIFE

INSURANCE

COMPANY

PVT

LIMITED About Vysya Bank Vysya Bank is one of the most aggressive of the oldergeneration private-sector banks. With the investment from a foreign partner, Bank Brussels Lamberts, in the equity of the bank, it is expected to gear up to effectively fight competition in the new liberalised era. Vysya Bank is a big player given its significant branch penetration. It has a very high degree of retail focus with good customer service. The Vysya Bank is one of the largest private banks in India with around 2 million customers and 480 retail outlets. About ING ING Group, with an asset base of over Rs. 28,42,000 crore is a global financial institution of Dutch origin, which is active in the field of banking, insurance and asset management in more than 60 countries, with nearly 90,000 employees. ING comprises a broad spectrum of prominent

companies working close to the customer, many of them operating under their own brand names. ING Insurance ING Insurance is the worlds second largest life insurance company as per latest Fortune rankings with a client base of over 50 million since it acquired ReliaStar and Aetna Financial Services earlier this year. It is the third largest financial services company in Europe and the tenth largest financial services company in the World. The Joint Venture ING has joined hands with Vysya Bank, one of India's leading private sector banks, to form ING Vysya Life Insurance, which is expected to be the first Bankassurance venture in the country. Together they have roped in GMR group, which has wide ranging interests in fields such as power generation, infrastructure, manufacturing, software and banking. As per the JV agreement, Vysya Bank would hold 49 per cent stake, ING 26 percent, and the GMR Group would hold 25 per cent. The paid up capital of the joint venture is Rs. 110 crore. 7. MAX NEW YORK LIFE INSURANCE COMPANY

LIMITED

Max India Limited Starting early 1999, Max has refocused itself into building a company based on the knowledge platform that India represents. Services Today, Max is building businesses It has in the emerging knowledge-based areas of Healthcare, Financial and Information on its own Technology. and by grown in independently joining hands

partnerships with major international companies where specific business opportunities are best addressed through joint ventures. Max India has a significant presence in the most vital & fast growing sectors of the Indian Economy, Telecommunication services, Electronic components distribution, Speciality Plastic Films and Bulk Pharmaceuticals. These diversified businesses are organised as Max India's 100% owned Business Units (BU) and equity sharing Joint Ventures (JV). Each of the BUs & JVs, fully empowered to lead their operations, have grown and obtained leadership position in their respective industries by providing high quality products and services, working closely with their customers. New York Life International Inc. In 1998 New York Life International Inc., a Fortune 100 company, had total revenues amounting to almost US $ 20 billion, and was rated the number one provider of new life

insurance policies in the United States. In the same year, New York Life was also the leader in insurance sales to the growing Indian community in the Unites States. The Joint Venture Max New York Life is a partnership between Max India Limited, one of India's leading multi-business corporations and New York Life, a Fortune 100 company. Max New York Life Insurance Products

Whole Life Plan 5year term renewable and convertible Insurance Endowment Plan

8. MET LIFE INDIA INSURANCE COMPANY Metropolitan Life Metropolitan Life Insurance Co., established in 1867, is a member of Metropolitan Life Group and is licensed in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Canada. Its major lines of business are individual and group life. MetLife, the second-largest U.S. life insurance company measured by assets, is a household name in the market, which is a competitive advantage. The company has excellent capital, investments, and liquidity.

M Pallonji & Co. Pvt. Ltd. M Pallonji & Co. Pvt. Ltd. is primarily engaged in contracting and has site offices all over India. With industrial coating and painting as their forte, have undertaken major contracts for power generating stations (hydroelectric and thermal), chemical and fertilizer factories, petroleum refineries, offshore oil and gas platforms, etc. The company is the pioneer contractor in India, which has successfully executed platform-based underwater marine growth removal from ONGC structures at the Bombay High offshore field on a turnkey basis. The company is also Patron Members of The Steel Structures Painting Council, U.S.A. and Bronze Corporate Sponsor of NACE International, U.S.A. It has also diversified outside their main line of business into the field of non-conventional energy sources. The Jammu and Kashmir Bank Limited The J&K Bank Ltd. incorporated on October 1st 1938, commenced business on July 4th, 1939. From a small beginning the bank has grown to become a giant with a network of 440 branches spread over the length and breadth of the country. The J & K Bank is the first state owned bank of the country and 53% of equity is held by the Govt. of J & K .The bank

has a consistent track record of growth and profitability. It has a unique distinction of being banker to the J & K State Govt. and has also been appointed by RBI as its agency in J & K. J K bank is one of the few banks in the country which has been able to show exemplary performance in adjusting to the rigorous prudential norms. The Joint Venture Met Life India Insurance Company, a joint venture of US insurance major Met Life, Jammu and Kashmir bank, Pallonji Group and some high networth individuals, has started its operation with an initial capital of Rs.125 crore and has plans to increase the same to Rs.450 crore over a period of five years. Metlife has set a target of 15000 policies for the first year of operation and has plans to recruit over 5000 agents over the time.

9. OM KOTAK MAHINDRA LIFE INSURANCE LTD Kotak Mahindra Finance Limited Kotak Mahindra is one of India's premier financial services groups, with a range of over two dozen highly-specialized products and services spread over a number of companies and with a client list that spans more than 500 Indian and

international firms. Starting as a one-product company in the mid-80s, they've evolved into a full-service financial conglomerate employing over 550 people across 30 centers in India and in Dubai, London, New York and Mauritius. Kotak Mahindra Finance Limited(KMFL) is a diversified financial services company covering auto and consumer finance, asset management, investment banking, securities trading and equity research. Old Mutual plc. Old Mutual plc. is a leading financial services provider in the world, providing a broad range of financial services in the area of insurance, asset management and banking. It is a leading life insurer in South Africa, with more than 30% market share. The partnership with Old Mutual plc., provides the Kotak Mahindra group with an international perspective and expertise in the life insurance business. The Joint Venture The joint venture OM Kotak Mahindra Life Insurance started off with an initial net worth of Rs. 150 crore, with 74:26 stake between KMFL and OM The Life Insurance business offers Kotak Mahindra with an opportunity to leverage its core strengths of Wealth Management and Retail Distribution.

OM Kotak Mahindra Life Insurance Products

Kotak Endowment Plan Kotak Insurance Bond Kotak MoneyBack Plan Kotak Term Assurance Plan Kotak Group Term Plan Kotak Credit Term Group Plan

11. TATA AIG LIFE INSURANCE COMPANY LIMITED TATA Group Tata Enterprises with 82 companies, spread over seven sectors and with an annual turnover exceeding US $ 8.8 billion, employs more than 262,000 people. Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance, aviation, iron and steel. Tata companies have forged a number of global alliances with eminent international partners in several fields. In terms of capital market performance as many as 40 listed Tata companies account for nearly 5% of the total market capitalization of all listed companies. The Group has had a long association with India's insurance sector having been the largest insurance company in India prior to the nationalisation of insurance. TATA Group in Insurance The Late Sir Dorab Tata, was the founder Chairman of New India Assurance Co. Ltd., a group company incorporated way back in 1919. Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972. Not deterred by the move, Tata group have ventured into risk management

services having tied up with AIG group, back in 1977, with the incorporation of Tata AIG Risk Management Services Pvt. Ltd. AIG American Insurance Group is the leading U.S. based

international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world.

AIG's Life Insurance operations comprise of the most extensive worldwide network of any life insurer. AIG's global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, institutional, retail and direct investment fund asset management, real estate investment management, and retirement savings products.

The Joint Venture Tata AIG Life Insurance Co. Ltd. is capitalised at Rs. 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in the balance 26 per cent. Mr. George Oommen has been named managing director of Tata AIG Life.

Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups.

Company LIC ICICI Prudential Birla Sunlife Tata AIG HDFC Standard Allianz Bajaj Max New York Others Total

Premium (Rs.million) 59187 2464 988 792 760 582 526 1384 6683

% of Total 88.8 3.7 1.5 1.2 1.1 0.9 0.8 2.0 100

Policies (in million) 9.9 0.14 0.05 0.08 0.06 0.08 0.05 .22 10.6

% of total policies 94.2 1.3 0.5 0.8 0.8 0.8 0.5 2.0 100

From the above data we can see that LIC is having maximum market share according to total market that is 10.6 . we can also see the market share of different players in insurance sector.

These top players has been taken on the basis of premium and policies(in terms of percentage)

The Malhotra Committee Report

Structure

Government stake in the insurance Companies to be brought down to 50%

Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations

All the insurance companies should be given greater freedom to operate

Competition

Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry

No Company should deal in both Life and General Insurance through a single entity

Foreign companies may be allowed to enter the industry in collaboration with the domestic companies

Postal Life Insurance should be allowed to operate in the rural market

Only one State Level Life Insurance Company should be allowed to operate in each state

Regulatory Body

The Insurance Act should be changed

An Insurance Regulatory body should be set up

Controller of Insurance (Currently a part from the Finance Ministry) should be made independent

Investments

Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%

GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time)

Customer Service

LIC should pay interest on delays in payments beyond 30 days

Insurance companies must be encouraged to set up unit linked pension plans

Computerisation of operations and updating of technology to be carried out in the insurance industry

Other recommendations in the report were:

The private sector should be allowed to enter insurance business. No single company should be allowed to transact both life and general in-surance business. The number of new entrants should be controlled.

The minimum paid-up capital for a new entrant should be Rs.100 crore (about $28 million). How-ever, a lower capital requirement can be pre-scribed for state level cooperative institutions taking up life insurance business.

The promoters' holding in a private insurance company should not exceed 40% of the total. However, if the promoters wish to start with a higher holding, they should be permitted to do so provided their holding is brought down to 40% within a specified period of time

through public offering. No person other than the promoters should be allowed to hold more than 1% of the equity. Promoters should at no time hold less than 26% of the paid-up capital.

Regulatory and prudential norms as well as conditions for ensuring level playing field among insurers should be finalized early so that intending entrants into the insurance business would be aware of the stipulations they would have to comply with. These conditions should aim to ensure that life insurers do not neglect the small man or the rural business and that the general insurers have balanced portfolios.

Before the private sector is allowed to enter the insurance field, the Controller of Insurance should start functioning effectively.

Steps should be initiated for the establishment of a strong and effective independent regula-tory authority in the form of a statutory autonomous board on the lines of Securities and Exchange Board of India (SEBI).

Though nationalized insurance companies are in a position to face competition, it is essential that they quickly upgrade their technology, reorganize themselves on more efficient lines and are enabled to operate as truly board-run enterprises.

If and when entry of foreign insurance companies is permitted, it should be done on selective basis. They should be required to float an Indian company for the purpose, preferably in joint venture with Indian partner

Overall, the committee strongly felt that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition.But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.1 bn. This amount is not very high for foreign firms, as it translates to only about US$25 million. Further, to date it is unclear whether equity should be payable in one go or should be brought in as instalments. Also, the foreign equity participation was to be restricted to only 40%. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.

The industry and analysts find that there is lack of clarity in the following areas:

Though coverage of rural areas was to be made compulsory, it raises the question as to who would subsidise the rural policies as they would be difficult to service and hence costs will go up.

There is some confusion with respect to investments. Where should the funds be invested? Currently 70% of the funds with LIC & GIC are invested in Government securities. Would new entrants be allowed to invest in GOI securities?

The report also does not enumerate exit options available to the new entrants. In the event of failure, there should be an arrangement made whereby the other companies pool in to bail the customers, who in all probability would be middle class individuals.

On the basis of the report, the then Finance Minister P. Chidambaram proposed the opening up of insurance to the private sector,

Conclusion

Ranking of companies on the basis of various parameters: Premium Wise: 1.ICICI Prudential life insurance 2. HDFC Standard Life Insurance 3. LIC 4. BIRLA Sunlife Insurance 5. Allianz Bajaj Life Insuranc Affordability 1. 2. 3. 4. 5. Rider: 1. 2. 3. 4. 5. ICICI prudential Life Insurance Allianz Bajaj Life Insurance Birla Sun life Insurance HDFC Standard Life Insurance LIC LIC ICICI Prudential Life Insurance HDFC Standard Life Insurance Birla Sunlife Insurance Allianz Bajaj Life Insurance

Life Insurance Statistics Indian population Urban population Rural population LIC policy holders LIC agents No. of branches Premium income Book value of Investments NCAER estimate of insurable population Estimated market by AD 2000 322 bn 925 mn 257 mn 668 mn 77.7 mn 5,58,000 2024 163 bn 683 bn 240 mn

BIBLIOGRAPHY
1. Markting Management By Philip Kotlar 2. Markting Research By Harpar W. Boyd, Jr Westfall,Stasch 3. Economic Times 4. Mazagines

a) Insurance Plans b) Insuranc Watch c) Insuranc World 5. Intenet www.licindia.com www.irdaindia.com