A

SUMMER TRAINING PROJECT REPORT ON

Partial fulfillment of the requirement of two years full time Master of Business Management

(MBA) SUBMITTED TO
DEPTT.OF BUSINESS ADMINISTRATION (M.D.U ROHTAK)

SUBMITTED BY
AMAR SINGH RATHOD MBA IInd SEM ROLL NO.

ST. THOMAS MANAGEMENT INSTITUTE JHANGIRPUR JHAJJAR HARYANA

2008-2009

INDEX
1.CERTIFICATE 2.DECLARATION 3.ACNOWLEDGMENT 4.PREFACE 5.INTRODUCTION 6.HISTORY OF INSURANCE 7.RELIANCE LIFE INSURANCE 8.PRODUCT MIX 9.MARKETING DEPARTMENT 10.FINANCE DEPARTMENT 11.DATA ANALYSIS & INTERPRATION 12.CONCLUSION 13.QUESTIONNAIRE 14.BIBLIOGRAPHY

GFCGF

DECLARATION
I, AMAR SINGH RATHOD from MBA 2nd Sem student of St. Thomas Management Institute, Jahangirpur, Jhajjar (Haryana) hereby that the project entitled, A study on Reliance Life Insurance, is an original work and the same has not been submitted to any other institute for the award of any other degree. The interim report was presented to the supervisor on ______________________ and the pre- submission presentation was made on ___________________. The feasible suggestions have been duly incorporated in

consultation with the supervisor.

Countersigned

Signature of the Supervisor the Candidate

Signature of

Forwarded by SINGH RATHOD

AMAR

AKNOWLEDGEMENT
I would like to thank my project guide Mr. NAVEEN CHAND SHARMA, Sales Development Manager RELIANCE Life Insurance, DEHLI for guiding me through my summer internship and research project. His encouragement, time and effort are greatly appreciated.

I would like to thank Prof,. for supporting me during this project and providing me an opportunity to learn outside the class room. It was a truly wonderful learning experience.

I would like to dedicate this project to my parents. Without their help and constant support this project would not have been possible.

Lastly I would like to thank all the respondents who offered their opinions and suggestions through the survey that was conducted by me in DEHLI.

Once again my gratitude to the RELIANCE Life insurance. For their kind co-operation.

VGHVGH

PREFACE
The Insurance Regulatory and Development Authority, IRDA for short, has laid down that those who wish to

become insurance agent will be licences only after they complete a course of study and pass an examination prescribed by it. In 2000, when the IRDA made the relevant regulation s, the course of study was to last 100 hours. The course, IC 33, was prepared keeping in mind that requirement. In 2007 the period of compulsory study has been reduced to 50 hours. Accordingly , the prescribed syllabus has been modified .The revised IC 33 has been prepared covering the new syllabus.

The contents of this revised course deal with all essential concepts, which, anybody working with the business of life insurance must know.These concepts form the basis of the life insurance business . Insurers will have different practices and offer different benefits in their plans. All of them will be based on these concepts. The details of the practices and theplans of each insurer, will have to be learnt from the respective insurers.

INTRODUCTION
people can be the greatest asset or biggest liability - as the clich goes the only way to improve corporate performance is by motivating employees to put in their best efforts. This means rewarding them and to ensure reward and recognition. Together result in higher return on investment . The best way to achieve both objective reward and ROI is to have the right metrics in place to measure employees performance. Measuring performance is not as simple as it looks. The performance measurement system have become more and mare sophisticated in recent decade. Every system has its own limitation . there is in fact no perfect system that can be adopted without modification in any company. At the same time the performance management process encourage an on going dialogue between mangers and employees. The manager share their insight with management team during staffing reviews. Conducting periodic staffing reviews gives Management opportunity and discipline to discuss their views. How to support and develop their top players. And how to deal with ones who underperformers. Staffing reviews and the use of objective performance metrics are by no means the easiest ways to evaluate employees. But they are by far the most effective way to establish performance driven culture that deliver results. Various approaches to the performance measurement are available to help assess the degree to whih the behavior of employees at all organization level contributes to the implementation of strategies . Measure of performance are necessary for the implementation of strategies . Measure of performanc are

necessary for the functioning of reward system. Performance mesurment provide feedback on the degree to which the behavior are congruent with organizational strategies. PMS is valid source of guidance for future development effort.

AMAR SINGH RATHOD

HISTORY OF INSURANCE
INSURANCE has

been known to exist in some form or other since 3000 BC. The Chinese traders, traveling treacherous river rapids would distribute their goods among several vessels, so that the loss form any one vessel being lost would be partial and shared, and not total the ancient land of Babylonia where traders used to bear risk of the carvan by giving loans, which were later repaid with interest when the goodsarrived safely. The concept of insurance as we know today took shape in 1688 at a place called Lloyds Coffee House in London where risk bearers used to meet to transact business. This coffee house became so popular that Lloyds became the one of the first modern insurance companies by the end of the eighteenth century. Marine insurance companies came into existence by the end of the eighteenth century. These companies were empowered to write fire and life insurance as well as marine. The Great Fire of London in 1966 caused huge loss of property and life. With a view to providing fire insurance facilities, Dr. Nicholas Barbon set up in 1967 the first fire insurance company known as the Fire office.

Life insurance in its modern form came to India from England in 1818. The Oriental Life Insurance Company was the first insurance company to be set up in India to help thewidows of European community. The insurance companies, which came into existence between 1818 and 1869, treated Indian lives as subnormal and charged an extra premium of 15 to 20 percent. The first Indian insurance company, the Bombay Mutual Life Assurance Society, came into existence in 1870 to cover Indian lives at normal rates. The Insurance Act, 1938, the first comprehensive legislation governing both life and non-life branches of insurance were enacted to provide strict state control over insurance business. This amended insurance Act looked into investments, expenditure and management of these companies. By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and 75 provident societies carrying on life insurance business in India. Insurance business flourished and so did scams, irregularities and dubious investment practices by scores of companies. As a result the government decided to nationalize the life assurance business in India. The Life Insurance Corporation of India (LIC) was set up in 1956. The nationalization of life insurance was followed by general insurance in 1972.

TIME LINE IN INSURANCE HISTORY

(MAJOR LANDMARKS)
1818 British introduced the life insurance to India with the Establishment of the Oriental Life Insurance Company in Calcutta.

1850 Non life insurance started with Triton Insurance Company.

1870 Bombay Mutual Life Assurance Society is the first India owned life insurer.

1912 The Indian Life Assurance Company Act enacted to regulate the life insurance business.

1938

The Insurance Act was enacted.

1956 Nationalization took place. Government took over 245 Indian and foreign insurers and provident societies.

1972 Non-life business nationalized, General Insurance Corporation (GIC) came into being.

1993 Malhotra committee was constituted under the chairmanship of former RBI chief R. N. Malhotra to draw a blue print for insurance sector reforms.

1994

Malhotra committee recommended reentry of private players.

1997 IRDA (Insurance Regulatory and Development Authority) was set up as a regulator of the insurance market in India.

2000 IRDA started giving license to private insurers. ICICI Prudential, HDFC were first private players to sell insurance Policies.

2001 Royal Sundaram was the first non-life private player to sell an insurance policy.

2002 Bank allowed to sell insurance plans as TPAs enter the scene, insurers start setting non-life claims in the cashless mode.

RELIANCE LIFE INSURANCE COMPANY

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd., a part of Reliance Anil Dhirubhai Ambani Group. Reliance Capital is one of India's leading private sector financial services companies, which ranks among the top 3 private sector financial services and banking companies. Reliance Life Insurance is not onlyone of India's fastest growing life insurance companies, but also counts among the top 4 private sector insurers. In just 2 years, the Company has crossed the mark of 1.7 Million policies. RLIC launched around 600 branches in 10 months, taking the overall branch network above to 740. Reliance Life Insurance Co. is one of the only two ISO 9001: 2000 certified Life Insurance companies in India. It has been awarded with the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Ceritificate of Merit in the Financial Services category by Council for Fair Business Practices (CFBP). Given below is the list of the policies provided by Reliance Life Insurance Company:

HISTORY
Reliance Capital Limited announced the launch of its life insurance business on February 1, 2006. This was after obtaining the required regulatory approvals from the Registrar Of Companies and the Insurance Regulatory and Development Authority. It was in August 2005 that the ball was set rolling when Reliance Capital Limited, the financial arm of Reliance Anil Dhirubhai Ambani Group (ADAG) announced the requisition of 100 % shareholding in AMP Sanmar Life Insurance Company Limited; and the formal transfer of shares took place in October 2005.The company will issue all policy contracts under the Reliance Life Insurance Company limited name. All the existing policy contracts also stand transferred to the Reliance Life Insurance entity with all the original contractual terms and commitments intact.

JOURNEY SO FAR
2005 August: Anil Dhirubhai Ambani Group (ADAG) announces the acquisition of 100 percent shareholding in AMP Sanmar Life Insurance Co. Ltd. 2006 January 17: Mr. Nandgopal participates in a one-day conference onOptimising growth opportunities through Distribution Matrix: Emerging Bancassurance organized by the Asia Insurance Post at the Taj President, Mumbai. February 1: Rliance Life Insurance officially launched. February 16, 17, 18: Strategy meet at the Reliance Management Institute. Amongst those who participate are the CEO, COO, Functional Heads, Regional Managers and Regional Sales Managers. February 26: A Puja held at the Church gate office situated

in Express Building, 4th Floor, 14 E Road, Mumbai. March 1: Churchgate office inaugurated by Mr. Amitabh Jhunjhunwala, Mr. Amitabh Chaturvedi and Mr. Nandgopal. March 6: Shifting to the new premises at Churchgate commences. March 7: The new office at Chennai, at the Trapezium, First Floor, #39, Nelson Manickam Road, inaugurated by their CEO Mr. Nandgopal, Mr. KV Srinivasan and Mr. Sureshbabu also graced the occasion.

MISSION
The mission of Reliance Life Insurance Company Limited is to be the best in every sphere- business results, customer care and employee focus. The aim of the company is to Think Bigger and Think Better

CORE VALUES
Reliance Life Insurance Company Limited has some core values which are listed as follows: 1) Result Oriented 2) Performance Driven 3) Customer Focused

4) Learning and Development Oriented 5) Employee Centric 6) Informal and Fun

FUTURE PLANE
Forty-four new branches to be opened across the country in the coming months; and a pan India presence with 162 branches in the coming year. A state-of-the-art customer care centre will provide continuous, responsive services to the caller and promptly address queries, collate feedback and suggestions from the caller, who may be bothprospective and existing clientele and from channel partners in Chennai and Mumbai. It will be launching additional products aimed at providing unparalleled service to its valued clientele.

HEAD OFFICE
Reliance Life Insurance Company Limited, The Trapezium, 39, First Floor, Nelson Manickam Road,

Chennai 600 029

BRANCHES
They have so many branches and substations in the India. They have around160 branches in the India. And they have planned to open more branchesacross the country in the coming months.

PRODUCT MIX

1.TRADITIONAL PLAN
Life insurance products are designed to suit the requirements of customers. Fundamentally the product provide for: Risk cover

 Investment Health cover In every product, to a certain degree, risk cover is imperative for it to fall under the category of insurance. Based on the coverage of the product, the premiums are calculated and the customer pays accordingly. In order to suggest the right product, it is essential for an agent to understand the requirements of the customer well. Reliance Life Insurance Company Limited has offered 9 traditional plans to the customers, which are listed as follows: 1) Reliance Term Plan 2) Reliance Whole Life Plan 3) Reliance Child Plan 4) Reliance Endowment Plan 5) Reliance Special Endowment Plan 6) Reliance Cash Flow Plan 7) Reliance Credit Guardian Plan 8) Reliance Special Credit Guardian Plan Each of the above traditional plans is discussed as follows: 1) Reliance Term plan: This insurance policy is designed for those who only want life cover for the protection of their family, and do not wish to save for themselves. It can also be useful to business firms that wish to provide financial security to their business against the sudden loss of partners or valuable manpower. Sincethere is no saving element or bonus provision, the premium is very low.Hence, this is a high-risk plan with a low premium. Features: a) Purely a term plan b) Entry age minimum 18 years and maximum 65 year c) Maximum premium paying term is 30 year

d) Loan facility N.A. e) Maturity amount = Sum assured 2) Reliance Whole Life Plan: This insurance policy is designed for people who do not wish to avail of any benefits themselves but wish to create an immediate estate to protect their family by availing of insurance cover on their life at a very low cost.

Features: a) It is a whole life insurance policy with profits b) Low cost life cover c) Maturity age is 85 year or 99 years last birthday as chosen d) Maturity amount = Sum assured + Vested bonus e) Tax benefit is available

3) Reliance Child Plan: This insurance policy is designed for people who wish to save money for a future time when there will be a recurring need for substantial amounts of money. This is especially true when it comes to paying large sums of money for higher education as and when your son or daughter is studying to become an Engineer, a Doctor or specialize in some other field, or is perhaps planning to go abroad. This money is payable in equal installments over the last 4 years of the policy term. Features: -

I. Minimum entry age is 20 year and maximum 60 year a) Minimum sum assured is Rs. 25,000. b) Minimum premium paying term is 5 year and maximum 20 year c) Tax benefit is available d) Maturity amount = Four equal installment of sum insured in last four year plus vested bonus in the last year e) Loan facility is available 4) Reliance Endowment Plan: Reliance Life Insurances Reliance Endowment Plan is the key to all your financial needs. It is an inexpensive and easy way to protect you, your family or your business. In a nutshell this plan will keep you financially prepared for all the special occasions in your life - your daughters wedding, your childs university education or even a new office for your business - by eliminating the burden that a shortage of money creates. In the event of your untimely death, Reliance Endowment Plan will also assist your loved ones through this difficult time by the financial support that it provides. Reliance Endowment Plan also gives you the additional benefit of participating in the companys profits, which you will receive at the end of the policy period. Features: a) Entry age minimum is 5 year and maximum 65 year b) Maturity age minimum is 18 year and maximum 75 year c) Minimum premium paying term is 5 year and maximum 35 year in case of regular and in case of single 15 year

d) Minimum sum assured is Rs. 25,000 or as determined by the minimum premium e) Maximum sum assured is Rs. 5,00,000 (entry age below 18 years and no limit for entry age 18 and above) f) Premium mode annual, half yearly, quarterly and monthly (by salary deduction only) g) Loan up to 90% of the surrender value of the policy h) Maturity amount = Guaranteed sum assured + Reversionary bonus 5) Reliance Special Endowment Plan: This insurance policy is designed for people who wish to combine savings with extended security. The unique feature of this policy is that life protection continues for five years after you have stopped the payment of premium. Payment of sum assured at the end of premium paying term and extension of life cover thereafter for the full sum assured for a period of 5 years, are characteristics of the policy. This plan also participates in the profits. Features: a) Entry age minimum 12 year and maximum 65 year b) Minimum sum assured is Rs. 25,000 c) Minimum premium paying term is 10 year and maximum 40 year d) Unique feature of this policy is that five year life protection continues after you have stopped the payment of premium e) Tax benefit is available f) Under this policy bonus is compounded yearly

g) Loan facility is available h) Maturity amount = Full sum assured before maturity date + Vested bonus at the time of maturity date 6) Reliance Cash Flow Plan: This insurance policy is designed for those who have a recurring need for reinvestment in business or look for short-term investment channels. The advantage of the policy is that they need not part with a sizable amount of money at any one time, but create, through regular premium payments, a periodic return of lump sums which become available for reinvestment at higher returns, while providing simultaneously, substantial life cover. Alternatively, it can be used to meet any immediate financial crisis in the family like your son's college admission, your daughter's engagement, and renovation of your home or perhaps, a holiday abroad. The money is payable in installments. The first installment is paid at the end of the 4th year and thereafter at the end of every 3rd year. Features:a) Plan with profits b) Minimum entry age is 15 year and maximum is 63 year c) Maximum premium paying term is 34 year d) Loan facility is not available e) In case of death full sum assured + accrued bonuses up to the date of death is payable immediately f) In case of survival up to maturity date all premium paid g) Rider accident death and critical illness h) Mode of payment is available 7) Reliance Credit Guardian Plan: -

This insurance policy is designed for those who not only safeguards individuals but also families and businesses from the financial hardship that could arise from unfortunate and unexpected death. Features: a) Loan protection against home, home improvement, two wheelers and four wheeler b) In case of death remaining loan amount paid immediately c) In case of survival no benefit is available d) Premium payment option for single and regular is available e) Premium paying term is 2/3 of loan period and remaining period paid by the company 8) Reliance Special Credit Guardian Plan: This insurance policy is designed for those who not only safeguards individuals but also families and businesses from the financial hardship that could arise from unfortunate and unexpected death, disability or critical illnesses. Features: a) Loan protection against home, home improvement, two wheelers and four wheelers b) In case of death remaining loan amount paid immediately c) In case of survival no benefit is available d) Premium payment option for regular and single is available e) Premium payment term is 2/3 of loan period and remaining period paid by the company

f) Maturity amount = All the premium paid amount g) Tax benefit is available

2.UNIT LINKED PLAN

A unit-linked policy is a life assurance policy in which the benefits depend on the performance of a portfolio of shares.

Each premium paid by the insured person is split: a part is used to provide life assurance cover, while the balance (after the deduction of costs, expenses, etc.) is used to buy units in a unit trust. In this way, a small investor can benefit from investment in a managed fund without making a large financial commitment. As they are linked to the value of shares, unit linked policies can go up or down in value. Policyholders can surrender the policy at any time and the surrender value I the selling price of the units purchased by the date of cancellation 9less expense). A small part of the contribution is used for providing life cover and the balance is invested in unit. Legal heirs are entitled to the amount of insurance cover and entitled units in case of death of the insured. Reliance Life Insurance Company Limited has also offered the two Unit Linked Plans, which are listed as follows: 1) Reliance Market Return Plan 2) Reliance Golden Years Plan Amongst the above plans the Reliance Market Return Plan is the largest selling plan of the Reliance Life Insurance Company Limited. The above two ULIP plans are discussed as follows: 1) Reliance Market Return Plan: Reliance Market Return Fund is the unit-linked product that helps you invest in the financial markets in a combination of investment instruments of your choice. You can enjoy the returns from the markets without the trouble of monitoring and managing your own investment portfolio and keeping track of the market movements. At the same time your investment premiums provide you with insurance cover. Reliance Market Return Fund unit-linked insurance plan provides you with a basket of fund options that balances your return and risk exposure while providing life cover at the same time. Features: a) Minimum entry age is 30 days and maximum entry age is 65 year b) Maximum policy term 40 year and minimum policy

term 5 year c) Mode of premium as annual, quarterly, half yearly and monthly Rs. 1000 (for salary deduction only) and Rs. 2500 (standing order/credit card) d) Top up premium minimum Rs. 2500 e) Option of investment fund i. Capital secure 100% fixed interest securities ii. Balanced minimum 80% fixed interest securities and maximum 20% in equity iii. Equity 100% equity iv. Growth minimum 60% fixed interest securities and maximum 40% in equity f) Loan facility is not available g) One switches every year free and subsequent switches charged 1% of the amount switched h) Partial withdrawals per year under regular and single premium options is 2 times i) Lock in period till today is 3 year j) Minimum unit account balance after each withdrawals is Rs. 10,000 2) Reliance Golden Years Plan: Reliance Golden Years Plan.. The Reliance Life Insurance no-worry stay happy retirement plan. Reliance Golden Years Plan is a flexible package that provides freedom of choice in choosing the type of investment, life cover, vesting options such as commuting and annuity options. Contributions provide Income tax savings as well. Reliance Golden Years Plan, a flexible pension product is available for all individuals who are between the ages of 18 and 65.

 Features: a) Entry age minimum is 18 year and maximum 65 year b) Minimum premium amount Rs. 10,000 and maximum is unlimited c) Mode of premium payment is available d) Pension plan with risk cover and without risk cover e) Choice of investment i. Capital secure fund 80% in equity and 20% in government security ii. Balanced fund 80% in government and 20% in equity f) No loan facility is available g) Tax benefit is available h) Annuity options i. Annuity payable for life ii. Annuity payable for 5/10/15 years certain and there after with life iii. Annuity payable for life with return of capital on death of the annuitant

MARKETING DEPARTMENT

1.DISTRIBUTION CHANNEL
.

This Reliance Life Insurance Company Limited is using five types of distribution channel, which are as follows:

1) Agency: Independent insurance agents represent a number of companies and can research these companies products to find the right combination for their clients. Independent agents & insurance producer groups are growing in prevalence. Although producer groups are in their infancy, their emergence may potentially be realignment in the distribution of financial services. Independent shops realized that by pooling production and funding a central support office, they had increased buying power.The one type of distribution channel, which Reliance Life Insurance Co. Ltd is using, is an agencychannel works as follows:

2) Bank Assurance: While a lot of bank relationships with insurance companies

have been established, life insurance sales have been slower than one would expect he primary bank insurance activities have been the distribution of annuities, credit life, and direct marketing insurance. Banks are failing to incorporate successful sales tactics used to sell otherfinancial services like investments. Another type of distribution channel is bank assurance. This channel is tie up with banks. In this channel the advisors using or targeting the bank customers to make a business with them i.e., to sell the policy of the company.

3) Corporate:To gain a better understanding of the demand amongst independent advisors for trust services and to gain a better feel for how independent advisors handle trust services, a research was performed with independent advisors across several broker/dealers and custodians. The interviews revealed that demand is greatest for living trusts among independent advisors, followed by demand for corporate trustee services. Another type of distribution channel is corporate, which are for employee benefits. This channel is tie up with corporate or small enterprises. Through these small enterprises, the advisors will sell the products/policy to customers of the small enterprises.

4) Rural Benefits:Brokerage firms have gained much of the institutional and personal trust business lost by the banks. These firms have steadily captured assets, primarily at the expense of the banks. The non-bank trust companies has increased in recent years as independent trust companies have emerged and more broker/dealers are integrated services. Insurance companies view

full-service brokers as a potentially new distribution channel as well. Another type of distribution channel is rural benefits. This channel works as a dealership. In this channel, the dealers will sell the policy to the target customers.

5) Web World:Direct sales of life insurance are growing rapidly, but many of the traditional full-serve players seem to be letting it go. Across all financial services, consumers are expressing a willingness to deal with a variety of providers on the web. Web sites are starting to pop up offering consumer insurance products especially designed for distribution over the web. Another type of distribution channel is web world. This channel is tie up with customer database. In this channel, the advisors will sell the policy to the target customers, which are taken from the customer database, are listed in the website.

2. PROMOTIONAL PROGRAMMES & TARGET SEGMENT

Promotional programmes and target segment are related to each other. The promotional programmes are made to motivate the advisors/agentsand sales managers to do more business i.e., to sell the more policies. The Reliance Life Insurance Co. Ltd has

made three promotional schemes, which are as follow: :

Login: 1st April to 31st May 06 Issuance till 15th June 06 2) R.A.R.E.:The full form of R.A.R.E. is Reliance Advisors Reward Experience. This programs consists of 1. New Advisor Incentive Program 2. Board of Advisors 3. Annual Discovery Series 4. Advisor Career Progression 5. RARE Club Loyalty Program The above programs are described as follows 1. R.A.R.E. Program New Advisor Incentives: Criteria There will be two levels in the New Advisor Incentive program A. Launch Pad B. Take Off 2. R.A.R.E. Program Board of Advisors: Criteria There will be two levels in the Board of Advisors program A. Time Period B. Parameters 3. R.A.R.E. Program Discovery Series: Criteria

There will be six levels in the Discovery Series program A. Qualification period B. Business criteria C. The qualification criteria will be the same for both the Global and the National Discovery Series D. Qualification for the Global Discovery Series E. Qualification for the National Discovery Series F. The top 150 will bb calculated based on WRP (Weighted Recd Premium) 4. R.A.R.E. Program Advisor Career Progression: Advisor Career Progression A. Business Associate B. Sales Manager 5. R.A.R.E. Privilege Club: Levels A. The RARE Club will have 6 different levels B. The criteria for entry into each level will be based on I. Business (WRP) II. Persistency III. Product Mix C. The qualification period is I. Logins from 1st Apr 06 to 31st Mar 07 II. Issuances from 1st Apr 06 to 15th Apr 07 Qualification Criteria

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum

General Insurance Corporation of India

(GIC)
The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with

effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies.

IN

ADDITION

TO

ABOVE

STATE

INSURERS

THE

FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private

players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-05). 1. HDFC Standard Life Insurance Company Ltd.
HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, AprNov 2005. They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have been covered through our group business tie-ups.

2. Max New York Life Insurance Co. Ltd .

Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders,

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

3. ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.

4. Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

5.Birla Sun Life Insurance Company Ltd.

Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.

1. Royal Sundaram Alliance Insurance Company

The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi.

2. Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany.

3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management.

Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001.

4. Cholamandalam General Insurance Company Ltd.

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi,

Chandigarh, Kolkata and Vizag. 5. TATA AIG General Insurance Company Ltd. Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group

holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake. Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines. Kotak

6.Mahindra OLD Mutual: Kotak Mahindra OLD Mutual is a 74:26 join venture between Kotak Mahindra bank and Old Mutual. It is a private sectorcompany. The company was registered on 10/1/2001. The market share for FY 2005-06 was 1.11%.

7.Aviva Life Insurance India: Aviva Life insurance is a 74:26 joint venture between Aviva and Dabur. It is a private sector company. The company was registered on 14/5/2002. The market share for FY 2005-06 was 1.14%.

8.ING Vysya Life insurance: ING Vysya Life Insurance is joint venture between Exide(50%), Gujarat Cements (14.87%), Enam (9.13%) and ING (26 %). It is a

private sector company. The company was registered on 2/8/2001. Themarket share for FY 2005-06 is 0.79%.

9.Met Life India: Met Life India is a 74:26 joint venture between 74:26 JV between J & Bank, Pallonji & Co and MetLife. It is a private sector company. The company was registered on 6/8/2001. The market share for FY 2005-06 was 0.40%.

10.Bajaj Allianz Life Insurance Co.: Bajaj Allianz Life Insurance Company is a 74: 26 Joint venture between Bajaj Auto limited and Allianz AIG. The company was registered on 3/8/2001. The market share for FY 2005-06 was 7.56%.

11. SBI Life Insurance Company Ltd: SBI Life Insurance Company is a 74: 26 Joint venture between SBI and Cardiff S.A. The company was registered on 31/3/2001.It is a private sector company. The market share for FY 2005-06 was 2.31%.

12.Sahara India Life Insurance Company Ltd.: First Wholly Indian Owned Private Life Insurance Company. The Company commenced operations from 30th October 2004. The market share for FY 2005-06 was 0.06 %. 13.Shriram life insurance company Ltd: Shriram Life is a recent entrant into the life insurance sector It is a 74:26 joint venture between the Shriram group through its Shriram Financial Holdings and Sanlam Life Insurance Limited, South Africa. The company expects to start operations soon.

2. MARKET SHARE

Now lets depict the market share of these players on diagram

Here we can see from the diagram that LIC is the market leader and it commands the major part of the total life insurance market. Its market share was approximately 98% before 2000 but after the entry of private players it has significantly decreased.

Among private players Bajaj Allianz stands first. It has the market share of approximately 7.56% in the total market and it constitutes 40% of the market share among private players. HDFC Standard comes third. SBI Life insurance Company Limited comes fourth. ICICI Prudential is also one of the fastest growing life insurance companies in India. Rest of the players has market share below 2%.

3) Capital Fund: -

FINANCE DEPARTMENT

FUND PERFORMANCE

There are four fund options, which Reliance Life Insurance Company Limited has offered, which are as follows:

1) Capital Secure Fund:This fund is for Reliance Golden Years Plan, and Reliance Market Return Plan. In line with the objective of protecting the capital against any erosion, 61.4% of the funds were invested in short-term Government Securities (Gilts) and to meet liquidity requirement higher about 40% of funds are kept in short term bank deposits. The net return credited to policyholders and the asset composition ratios are given in the boxes below.

ASSET ALLOCATION

2) Balanced Fund:This fund is for Reliance Golden Years Plan, and Reliance Market Return Plan. To take advantage of the bullish trend in the equity market, the equity holdings in the fund was maintained as close as possible to the maximum of 20% allowed for the fund. Bank deposits were maintained only for the purpose of liquidity management. To reflect their bearish view on the debt market the duration of the fixed income portfolio was kept low. Within the fixed income portfolio, allocation to Gilts was higher than corporate bonds. All the bonds in the portfolio are top rated. The asset composition, the details of the portfolio and the net returns are disclosed below.

3.GROWTH FUND
This fund is for Reliance Golden Years Plan, and Reliance Market Return Plan. To take advantage of the bullish trend in the equity market, the equity holdings in the fund was maintained as close as possible to the maximum of 20% allowed for the fund. To reflect their bearish view on the debt market the duration of the fixed income portfolio was kept low. All the bonds in the portfolio are top rated. The asset composition, the details of the portfolio and the net returns are disclosed below.

4) Equity Fund:This fund is for Reliance Market Return Plan. In line with the stated asset allocation pattern and their view of the market, the entire corpus of the fund was invested in equities. Net returns earned since inception and the full portfolio are disclosed below.

DATA ANALYSIS & INTERPRATION

DATA ANALYSIS & INTERPRETATION

DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES

7 10 3

2 LIC REL ICICI SBI 78 HDFC

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1 by that percent of respondents

DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS

25%

Cover Future Uncertainty Tax Deductions 55% Future Investment

20%

INTERPRETATION 55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively.

DATA

PROVIDES

FEATURES

OF

INSURANCE

POLICY

THAT

ATTRACTED RESPONDENTS

FEATURES OF INSURANCE POLICY

MON EY BACK GUAARENTEE

11% 15% 30% 7% 37%

LARGER RISK COVERANCE

EASY ACCESS TO AGENTS

LOW PREMIUM

REPUTATION OF COMPANY

INTERPRETATION
Majority of the respondent (37%) found Larger risk coverance as the most attracted feature of the all. DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS

0 0 81
S AV ING TOOL

100

74

TA X SA VING TOOL

FA MILY PROTECTION

INTERPRETATION
81% of the respondents have perception of Insurance being a saving tool.

 device.

And 74% of the respondents have perception of Insurance being a tax saving

But 100% of the respondents are with the view that Insurance is a tool to protect

your family. DATA SHOWS PEOPLES HAVING INSURANCE

30%

70%

Yes No

INTERPRETATION

Of the sample size of 400 surveyed respondents 70% of the respondents are having

Insurance policy. 30% of the respondents are either not having any Insurance policy at present or

their policy is already matured. And at present 100% of the respondents are with the view that Insurance is a tool

to protect your family. DATA SHOWS BUYING PROCESS OF THE PEOPLE

55% 45%

Customer approached Insurance company/Agent Company/agent approached customer

INTERPRETATION 44.5% of the respondents approached the Insurance Company / Agent. Whereas, 55.5% of the respondents were approached by the Company /Agent.

0% 40%

60%

Satisfied

Not satisfied

Not Responded

DATA SHOWS REASONS BEHIND FOR INSURANCE

80 100

Slice 1
INTERPRETATION

Slice 2

80

Slice 3

80.71% of the Respondents opted for Insurance for tax saving benefits. 80.71% of the Respondents opted for saving / Investments. But all of them, i.e.

100% of the respondents have opted for insurance for their family protection

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO

POLICY

0% 40%

60%

Satisfied

Not satisfied

Not Responded

INTERPRETATION 60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded. DATA SHOWS SATISFACTION OF +RESPONDENTS WITH RESPECT TO SERVICE AGENT

55.00%

45.00%

Satisfied

Not satisfied

INTERPRETATION 45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent.

11 21 51

0%

25

100%

33 32

LIC

Paying tax NSC

BOND

Not paying tax PPF PF

EPF

All of those who have taken a policy have responded. DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

INTERPRETATION

55.00%

45.00%

Satisfied

Not satisfied

45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded.

DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

11 21 51

25

33 32

LIC
INTERPRETATION

NSC

BOND

PPF

PF

EPF

29% of the respondents are with the view that insurance should be bought after

the age of 25 years. 10.5% of the respondents are with the view that insurance should be buyed after

the age of 35 years. Whereas, 60.5% of the respondents are with the view that buying of insurance do

not have any thing to do with age i.e. there is no age limitations. It can be purchased any time according to the need. DATA SHOWS PEOPLE OPINION ABOUT INDIAN INSURANCE COMPANIES

67

10 24

33

26

29

Inflexible plans Unsatisfactory service s Satisfactory Very good

Non user frie ndly Non Aggressive Good

CONCLUSION

CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. 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 impression by the marketing and advertising campaigns of insurance companies. A high penetration of print , radio and Television ad campaigns over the years is beginning to have its impact now. The general satisfaction levels among public with regards to policy and agents still requires improvement. But therein lays the opportunity for a relative new comer like ING. LIC has never been known for prompt service or customer oriented methods and Reliance can build on these factors

QUESTIONNAIRE

QUESTIONNAIRE

1.

ARE YOU EMPLOYED? YES NO If YES, only then proceed

2.

DO YOU HAVE ANY INSURANCE POLICY? YES NO

3.

WHICH INSURANCE POLICY DO YOU HAVE? LIFE NON-LIFE BOTH

4. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COVER? (RANK THEM) a) COVER FUTURE UNCERTAINITY b) TAX DEDUCTIONS c) FUTURE INVESTMENT d) ANY OTHER .. .. ... ...

5.WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT? (RANK THEM) a) LOW PREMIUM b) LARGER RISK COVERANCE c) MONEY BACK GUARNTEE d) REPUTATION OF COMPANY e) EASY ACCESS TO AGENTS ...

f) ANY OTHER

6. DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAYS SCENARIO IS NOT ESSENTIAL? . 7.. WHATS YOUR PERCEPTION ABOUT INSURANCE? (RANK THEM) a) A SAVING TOOL b) A TAX SAVING DEVICE c) A TOOL TO PROTECT FUTURE .. .. .

8..ARE YOU SATISFIED WITH THE POLICY? a) SATISFIED SAVING TOOL b) NOT SATISFIED c) NOT RESPONDING .. ..

9.

ARE YOU SATISFIED WITH THE SERVICE AGENT?

a) SATISFIED SAVING TOOL b) NOT SATISFIED c) NOT RESPONDING

10

DO YOU PAY TAXES? YES NO.

11. WHAT DO YOU INTENT TO GAIN FROM INVESTMENTS?

a) SAVING & RETURNS b) SECURITY c) TAX BENEFITS

. . .

12. WHATS THE RIGHT AGE TO BUY INSURANCE? a) AFTER 25 Yrs b) AFTER 35 Yrs c) AFTER 45 Yrs d) ANYTIME .. .. .. ..

13. ARE YOU PLANNING FOR NEW INVESTMENTS?

PLANNING NOT PLANING

BIBLIOGRAPHY

BIBLIOGRAPHY

1.

BOOKS/MAGAZINES REFFERED: STUDY GUIDEPRINCILES & PRACTICES OF LIFE /

GENERALINSURANCE, by AIMA. Books published by INSURANCE INSTITUTE OF INDIA LIFE-INSURANCE, by Mc GILL INSURANCEWATCH. MONEYOUTLOOK. 2. WEBSITES REFFERED: WWW.RELIANCELIFE.CO.IN

NSURANCE.COM

WWW.CIFAI

YOUTLOOK.COM

WWW.MONE

ANCE.IND.COM 3. REPORTS/ARTICLES REFFERED:

WWW.INSUR

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY. Dec2005. BRIEF PROFILE OF LIC, INDIADec 2006. REPORT: COPING WITH COMPETITIONJan2007