EXECUTIVE SUMMARY

Someone has greatly said that practical knowledge is far better than classroom teaching. During this project I fully realized this and come to know about the present real world of Insurance sector. It includes all the activities involved in providing insurance products to the final customers. I am pleased to know about the consumers wants and competitors activities in the real world of Insurance. The subject of my study is to analyze the present insurance sector and products offered by LIC by applying various tools like cold calling and through direct interaction with customers. I have also done research on the growth of private life insurance companies in the last five years. The report contains first of all brief introduction about the company. Then it contains the current status of private insurance companies and foreign insurance companies in India. I also put forward recommendations of the consumers and conclusions that will help LIC to provide consumer satisfactory services in the insurance sector.

CHAPTER 1 INTRODUCTION OF INSURANCE

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

B. Principles of Insurance 1. Indemnity The insurance company indemnifies, or compensates, the insured in the case of certain losses only up to the insured's interest. 2. Insurable interest The insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by
2

the kind of insurance involved and the nature of the property ownership or relationship between the persons. 3. Utmost good faith The insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed. 4. Contribution Insurers which have similar obligations to the insured contribute in the indemnification, according to some method. 5. Subrogation The insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for insured's loss. 6. Causaproxima, or proximate cause The cause of loss (the peril) must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded 7. Mitigation In case of any loss or casualty, the asset owner must attempt to keep the loss to a minimum, as if the asset was not insured.

RESEARCH OBJECTIVE

The report gives the brief background of the sector and proceeds to highlight the short comings of the existing setup and players. The benefits of liberalized sector are enumerated. The report also tries to identify the market potential for insurance products and the strategy that can we employed to exploit the same. The stress is also given on knowing the awareness level of general public.

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.

RESEARCH METHODOLOGY

To conduct the market research first of all it is necessary to create a research design. A research design is basically a blue print of how a research is to be conducted, it may include;

1. Choosing the approach.

2. Determining the types of data needed.

3. Locating the source of data.

4. Choosing a method of data.

HISTORY OF INSURANCE

The Britishers opened general insurance in India around the year 1700. The first company, known as the Sun Insurance Office Ltd. was set up in Calcutta in the year 1710.Insurance companies like Bombay Insurance Company Ltd was established in 1793. In 1818 it was conceived as a means to provide for English Widows. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence. The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization.

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.
5

Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and Nationalised.

TYPES OF INSURANCE

1. Life Insurance

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.

2. Health Insurance The term health insurance (popularly known as Medical Insurance or Mediclaim) is a type of insurance that covers your medical expenses. The concept of health insurance is new in India but its awareness is growing fast. Health insurance comes in handy in case of severe emergencies. Life is unpredictable, insurance
7

can make it safe and secure from bearing huge financial loss. A health insurance policy is a contract between an insurance company and an individual. Sometimes it is associated with covering disability and custodial needs. The contract is renewable annually. Health insurance is affordable and carries the assurance and freedom from insecurities that threaten normalcy now and then. The type and amount of health care costs that will be covered by the health plan are specified in advance. Health plans are available in two formats, individual and group plans. In an individual policy you are personally the owner of the policy. While in a group plan, the sponsor owns the policy and the people covered under it are called its members. 3. Fire Insurance Fire insurance is a form of property insurance which protects people from the costs incurred by fires. When a structure is covered by fire insurance, the insurance policy will pay out in the event that the structure is damaged or destroyed by fire. Some standard property insurance policies include fire insurance in their coverage, while in other cases; fire insurance may need to be purchased separately. Property owners should check with their insurance companies if they are not sure whether or not fire insurance is part of their policies, and if fire insurance is not included, it should be purchased. When purchasing fire insurance, people should be aware that some types of fires may not be covered. For example, a fire caused by an earthquake might be excluded from a fire insurance policy, as might a fire caused by an act of God. It is important to read the terms of the policy carefully, and to ask for clarification from the insurance representative if the terms are not clear. If policy does not appear to meet the need, it should be renegotiated until it is satisfactory.

4. Marine insurance Marine insurance is a type of insurance that covers boats and ships, as well as their cargo and in some instances the places where the boat or ship is docked. It has a colorful history, beginning informally in England during the 17th century. In 1906, the Marine Insurance Act was passed under British law, creating a standard operating procedure for policies that dictates the world's policies to this day. The standards set forth by the act are considered reasonable, but due to changes in technology and social standards, the act is generally seen as obsolete and is being replaced by more modern legislature. There are several varieties of insurance that can be taken out by a boat or ship owner. Marine cargo insurance covers whatever goods the boat is carrying. Inland marine insurance can be procured for floating vessels that are not ocean-bound, but travel primarily on lakes, rivers and reservoirs. There are also more general policies that cover the boat itself and its passengers, liability for damages to other moving vehicles and liability during an encounter with a non-moving object. These all fall under the heading of a marine insurance policy.

5. Credit insurance Credit insurance repays some or all of a loan when certain circumstances arise to the borrower such as unemployment, disability, or death. Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name "credit insurance" more often is used to refer to policies that cover other kinds of debt. Many credit cards offer payment protection plans which are a form of credit insurance.

 Accounts Receivable insurance also known as Credit or Trade Credit insurance is business insurance over the accounts receivables of the insured. The policy pays the policy holder for covered accounts receivable if the debtor defaults on payment

6. Vehicle insurance

Vehicle insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own, such as in a traffic collision. Coverage typically includes: Property coverage, for damage to or theft of the car; Liability coverage, for the legal responsibility to others for bodily injury or property damage; Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

10

7. Home insurance

Home insurance provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake, which require additional coverage. Maintenancerelated issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.

11

CHAPTER 2 INTRODUCTION OF LIFE INSURANCE CORPORATION OF INDIA (LIC)

Life Insurance Corporation of India (LIC) was formed in September, 1956, by an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital contribution from the Government of India. The then Finance Minister, Shri .C .D. Deshmukh , while piloting the bill, outlined the objectives of LIC thus to conduct the business with the utmost economy, and a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtaining maximum yield for the' policy holders consistent with safety of the capital; to render prompt and efficient service to policy holders, thereby making insurance widely popular. Since nationalization, LIC has built up a vast network of 2,048 branches, 100divisions and 7 zonal offices spread over the country. The Life Insurance Corporation of India 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, KenIndia ,Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation (International) E. C .Bahrain.The Corporation has registered a joint venture company in 26th December,2000 in Katmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with vishal Group Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap theAfrican insurance market.

12

COMPANY PROFILE OF LIC OF INDIA

13

LIC Operate All Over India The Life Insurance Corporation of India popularly known as LIC of India was incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign companies. It was established 52 years ago with a view to provide an insurance cover against various risk in life. the luminaries who spearheaded this move at that time visualised an entity that will provide life insurance to Indians, especially the vast rural masses, at an economical cost and channel the savings for the betterment of the nation. It is the largest life insurance company in India and also the countries largest investor. It is fully owned by the Government of India and headquartered in Mumbai.

The subsidiary companies under LIC are:

LIC of India, International A joint venture offshore company promoted by LIC, commenced its operation in july1989. The primary objective is to the US-dollar denominated policies which cater to the insurance needs of non-resident in Indians. It provides insurance services to policyholders who residing in Gulf. The LIC International operates in all Gulf Cooperation Council (GCC) countries.

LIC Nepal A joint venture company formed in September 2001 with the Vishal Group of Industries with a capital base of Rs.250mn. It is one of the largest capitalized insurance companies of Nepal. It has joint share between LIC of India (55%) Vishal Group (25%) and has a public participation to the extent o 20%.

14

Life Insurance Corporation Lanka Limited (LICL) A joint venture company formed in 2003 with the Bartleet Group of Companies, it is one of the oldest and reliable institutions in Sri Lanka. The combined strengths of these two formidable companies has enabled LICL to emerge as the premier provider of Life Insurance in Sri Lanka. The Indian-based blue-chip also has offices in UK, Mauritius, Fiji, and in all Middle East countries.

LIC Housing Finance Incorporated on June 19, 1989; its main objective is to provide long term finance for construction or purchase of houses or apartments. The company provides long terms finance to individuals for purchase, construction, repair and renovation of new \ existing flats\houses. It also provides finance on existing property for business, personal needs and gives loans to professionals for purchase or construction of clinics\ nursing homes\ diagnostic centers\office space and also for purchase of equipments. It has set up a representative office in Dubai and Kuwait to cater to the non- resident Indians in countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. It has client group of over 9,40, 000prudent house owners who enjoy the companys financial assistance.

LIC Housing Finance Limited Care Homes It is a Wholly-owned subsidiary of LIC Housing Finance. It builds and operates Assisted Community Living Center for senior citizens. It operates a network of approximately 6 regional offices, 13 back offices, and 127marketing offices.

15

Vision To emerge as a Transnationally competitive financial conglomerate of significance to societies and be the pride of India .

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.

16

Products and Services of insurance companies

LIC has eight zonal offices and 105 divisional offices located in different parts of India. It compromises of 2,048 branches and employs over 10, 02, 149 agents for soliciting life insurance business from public. LIC has extended its activities in 12 countries from outside India, primarily to cater to the insurance needs of nonresident Indians. LIC aims at strengthening it relationship with its vast customer base by providing value-added service such as credit cards and offering premium payment facility to the policyholders. It is the largest insurance player in India and its objective is to channelize its funds for the benefit of the community at large. It enjoys a near monopoly power in the solicitation and sale of life insurance policies in India. The corporation has major business houses as clients, under the group business of India. It has more than 1,18,000 corporate clients covering more than 3,15,00,000 members. Apart from the corporate group insurance business the pension& group schemes is responsible for AamAadmiBimaYojna,a social security schemes for the rural landless households under the aegis of the Government of India.LIC has been investing a major portion of its funds in socially-oriented sectors with a view to reach every insurable person in the country and provide adequate financial cover against death at a reasonable cost. Another goal is to mobilize peoples savings adequately attractive.LIC has recently tied up with Policybazaar.com an insurance portal that enables the consumers to get detailed information on the policy. It is one of the leading online non-life and life insurance aggregator to sell its policy JeevanAastha on the internet.

17

1. Flexibility Flexibility to choose Sum Assured. Flexibility to choose premium amount . Option to change level of Premium even after the plan has started (Top up facility). Flexibility to change asset allocation by switching between funds.

2. Transparency Changes in the plan & net amount invested are known to the customer. Convenience of tracking one s investment performance on a daily basis .

3. Liquidity Option to withdraw money after few years (comfort required in case of exigency). Low minimum tenure . Partial / Systematic withdrawal allowed.

4. Fund Options A choice of funds (ranging from equity, debt, cash or a combination). Option to choose fund mix based on desired asset allocation.

18

CHAPTER 3 PERFORMANCE OF LIC OF INDIA

The number of new policies marketed grew from 14.69 lakhs in 1961 to 2.18 croress in 2004-05 and the sum assured under this business rose to high of Rs. 1,79,886.66cr in 2004-05 from Rs.336.67 cr in 1957. The total funds of the corporation also grew from Rs. 702.80 cr in 1961 to Rs. 4,16,910.36cr in 2004-05. Investments , which were Rs. 329.74 cr in 1957 rose to a high of Rs.4,13,800.95 cr in 2004-05 ,allof which gets deployed for the development of the nation.The LIC has huge investible funds and the main source comes from the premiums collected from the policy holders. The Corporation invests these funds in various states, industries and also in various other countries. The LIC, while investing its funds, has to consider various factors and forces such as safety, liquidity and productivity of funds plus various other regulatory bindings in terms of investment norms, asset- liability management etc. In short, the LIC has to make its investments within the ambit of these bindings as a result, the corporation is not in apposition to pursue a prudent investment policy due to which its investment income may come under pressure. Adding fuel to the fire, the falling interest rate would also adversely affect the investment performance of the Corporation. Still at present LIC continues to be the dominant life insurer even in the post-liberalization phase of the Indian insurance industry. It is on new growth trajectory surpassing its own past records. The average premium growth so far has been 20%. With the targeted Rs.1,75,000crores total premium by the end of current fiscal, The life insurance giant is looking a market share about 75%. The corporation has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The state- owned corporation is targeting a business of
19

over Rs.3,00,000crores by2011-12. The life insurance major expects its assets size to grow about Rs.6,00,000cr or 75% in the next three years. In the current fiscal year, the company has recruited about two lakhs insurance agent across the country, which is more than double of the 90,000 agents hired in the previous fiscal. It has also hired 4,500 development officers in the current fiscal year and 5,000 new officers could be hired in the next fiscal. It has bagged various awards which include Loyalty Award 2009, Golden Peacock Innovative Product/Service Award 2009, Readers Digest Trusted Brand Award 2008 in the Platinum Category, CNBC Awaaz Consumer Awards 2008 and NDTV Profit Business Leadership Award 2008. Economic Times Brand Equity Survey rated LIC as the No.1 service brand of the country for the 5th consecutive year. In the chart below is shown the market share of LIC and private in terms of total premium collected.

ACHIEVMENTS AND AWARDS

CNBC Awaaz Consumer awards 2010

Reader

Digest

Trusted

Brand

Insurance category 2010

20

OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in World Brand Congress Award

" BEST LIFE INSURER CATEGORY "

Golden Peacock Innovative Product / Service Award - 2009

ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR

PRACTICES

21

Loyalty Award - 2009

NDTV Profit Business Leadership Award 2008

INDY's Silver Award for Best Corporate NASCOM IT USER Award 2008 Film

Business Superbrand India 2009

ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD, 2008

22

INVESTMENT PORTFOLIO OF LIC

The Life Insurance Corporation of India has been a nation builder since its formation in 1956. True to the objective of nationalization, the LIC has mobilized the funds invested by the people in the life insurance for the benefit of the community at large. The corporation has deployed the funds to the best advantage of the policyholders as well as the community as a whole, true to the spirit of nationalization. National priorities and obligation of reasonable returns to the policyholders are its main criteria for the investment. The total funds, so invested for the benefit of the community at large accumulated to Rs 751129 crores (provisional) as on 31st march 2008. The investment of the corporations funds is governed by Section 27A of the insurance act, 1938 subsequent guidelines/instructions issued there under by the Government of India from time to time and the IRDA by way of regulations. As per the prescribed investment pattern approved by IRDA, the controlled funds are invested as follows : Not less than 50% is invested in Government securities or other approved investments. Not less than 15% is invested in infrastructural and social sector investments. Not less than 35% in other investments, to be governed by exposure prudential norms.

23

CHAPTER 4 PRODUCTS OF LIC

INSURANCE PLANS As individuals it is inherent to differ. Each individual insurance needs and requirements are different from that of the others. LICs Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement.

CHILDREN PLANS

Jeevan Anurag Komal Jeevan Jeevan Chaaya Child Future Plan Child Career Plan

PLAN FOR HANDICAPPED DEPENDENTS

JeevanAdhar JeevanVishwas

24

ENDOWMENT ASSURANCE PLANS

Jeevan Anand Jeevan Amrit The Endowment Assurance Policy Jeevan Mitra(double cover endowment plan) Jeevan Mitra(triple cover endowment plan)

PLANS FOR HIGH WORTH INDIVIDUALS

Jeevan Shree-I Jeevan Pramukh

MONEY BACK PLANS

The Money Back Policy- 20 years The Money Back Policy- 25 years Jeevan Surabhi-15 years Jeevan Surabhi-20years Jeevan Surabhi-25 years
25

WHOLE LIFE PLANS

The Whole life policy The Whole life policy-limited payment The Whole life policy-single premium Jeevan Anand

TERMS ASSURANCE PLANS

Two Year Temporary Assurance Policy The Convertible Term Assurance Policy Anmol Jeevan-I Amulya Jeevan-I

PENSION PLANS Pension Plans are Individual Plans that gaze into your future and foresee financial stability during your old age. These policies are most suited for senior citizens and those planning a secure future, so that you never give up on the best things in life.

26

PENSION PLANS

Market Plus-I Jeevan Nidhi Jeevan Akshay-VI New Jeevan Dhara-I New Jeevan Suraksha-I

UNIT PLANS Unit plans are investment plans for those who realize the worth of hard-earned money. These plans help you see your savings yield rich benefits and help you save tax even if you don't have consistent income.

UNIT PLANS

Market Plus-I Profit Plus Money Plus-I Child Fortune Plus JeevanSaathi Plus

27

SPECIAL PLANS LICs Special Plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness!

GOLDEN JUBLIEE PLAN

New Bima Gold

HEALTH PLAN

Health Protection Plus

28

CHAPTER 5 SERVICE QUALITY

Your Policy Bond And Its Safety

Your Policy Number Policy Conditions Alterations In Policy If Your Policy Is Lost Your Contact Address Keep Us Posted Without Fail Admission Of Age Nomination Assignment When To Pay The Premiums Grace Period For Premium Payment How And Where To Pay The Premiums Policy Status Where Available Revival Of Lapsed Policies Availing Loans On Policies Surrender Value

29

Your Policy Bond and Its Safety The policy bond is the document that is given to you after we accept your proposal for insurance. The risk coverage commences after acceptance of your proposal and the conditions and privileges of your policy are mentioned in the policy bond. This is an important document which would be referred to for various servicing interactions with you Keep the policy bond safe. It will be required at the time of settlement of claims on the policy. You will also require it if you are availing a loan or want to assign the policy. Inform your spouse/Parents/Children as to where the policy is kept. In case you are handing over the policy bond to any person or office, please take a written acknowledgement. Keep a Photostat copy of the policy for your reference.

Your Policy Number The policy number is consisting of nine digits and can be found at the top left hand corner of the schedule of your policy bond. This is a unique identification number that distinguishes your policies from other policies and will remain unchanged through out the lifetime of the policy. Remember to quote the policy number every time in your correspondence, as it helps us to locate your records for reference.

Policy Conditions Every policy is taken for different types of needs; therefore the conditions for your policy will vary according to the Plan and Term of the policy. The policy schedule contains on the first page of your policy, like the ones mentioned above as well as other information like nominee, your address etc. It also shows the date of commencement of your policy, date of birth, date of maturity, due dates and months in which the renewal premiums are to be paid etc. The second page onwards carries the various policy conditions like risk coverage, additional risks
30

coverage if opted for, standard benefits that are available for all policies, accident benefit if opted for, exclusion of risks if any and other conditions that govern the contract of insurance. Apart from death benefits there are other standard benefits and benefits opted by the policyholder.

Alterations In Policy There may be instances when you would like to make alterations in your policy like change of premium payment mode, reduction in premium paying term etc. your applications may be given in writing to the branch that services your policy for our further action.

If Your Policy Is Lost Kindly make a thorough search before concluding that you have lost the policy bond. Look for the same within your residence, among your investment papers, at your office and even with your agent to whom you might have entrusted the document for some reason. It could have been even pledged with LIC/any other financial institution for availing a loan by you. LIC retains the policy bond when you go in for a loan against the policy. Make sure that the document you are searching is not one that has already been assigned to LIC, or to another financial institution. If the policy bond is partially destroyed due to natural causes like, fire, flood, etc, the remaining portion may be returned as evidence of loss of policy to LIC, while applying for a duplicate policy. In case you are sure that the policy bond is untraceable due to unknown causes, there is a simple procedure to comply with while applying for the duplicate policy at the branch that services your policy.

31

Your Contact Address Keep Us Posted without Fail Your address is very important for us. Without your latest address we would not be in a position to contact you for any service offering. We would not like to keep any benefit that is due to you pending for want of this very important information. Whenever you shift residences, please inform the new address to us. Other wise any communication we send to you, like premium notices, discharge vouchers for maturity and survival benefits etc., will get delayed in reaching you.LIC provides for change of addresses, inclusion of telephone numbers, mobile numbers and email addresses in your contact addresses information. Kindly inform your servicing branch to incorporate the same in your policy records.

Admission of Age Check your policy bond and see if your date of birth is correctly given there in. This is one of the factors on which the premiums you pay for your policy is arrived at. This would also form the basis of all future policies you might avail from us. In case your earlier policies do not have your date of birth incorporated and you do have a date of birth certificate issued by the competent authority, you may send an attested copy of the same to us, with a request to admit your age .

Nomination Ensure that the nominees name is correctly incorporated in the policy bond. You may change the nomination in your policy any time during the lifetime of the policy In case you have not included the name of the nominee till now, please do not delay; inform us your nomination immediately. Kindly note that the change of nomination has to be done in the branch that services your policy. The nominee is the person to whom the insurance claim amounts would be payable, in case anything unfortunate within the purview of the policy conditions happens to you.
32

The policy is usually taken by you to benefit your family nominate the persons wholl have the welfare of your family in your absence; the usual preferences being spouse and children. You may nominate even minors like your children, in which case you have to name another person wholl have the welfare of the minor children, as an appointee.

Assignment In case you are raising a loan against your policy from LIC or any other financial institution, your policy would have to be assigned to LIC or the financial institution. When you assign the policy the title of the policy is shifted from your name to that of the institution. The policy would be reassigned to you on the repayment of the loan. A fresh nomination should be done after reassignment of the policy. Assignment of policies can be done even when a loan is not required or for some special purposes.

When to Pay the Premiums Remember to pay your premium in time, even if our notices do not reach you. There may be a postal delay.LIC usually sends premium notices one month in advance to the due month of the premium. The months in which premiums are due are given on the first page of the Policy bond.

Grace Period For Premium Payment In case you have not paid the premium within the due date there is still time for you to make the payments without payment of interest on the premium. This period is called the grace period. (With the exception of some plans)The grace period for policies where the premium payment mode is monthly is 15 days from

33

the due date. The grace period for policies where the premium payment mode is quarterly, half-yearly or yearly is one month but not less than30days.

How and Where To Pay the Premiums By cash, local cheque(subject to realization of cheque),Demand Draft at Branch Office. The DD and cheques or Money Order may be sent by post. You can pay your premiums at any of our Branches as 99% of our Branches are networked. Many Banks do accept standing instructions to remit the premiums. So by providing a standing instruction to your Bank to debit your account for the premium amount and send it vide a banker scheque to LIC, on the due dates and months mentioned on your policy bond. Through Internet : Payment of premiums can be made through Internet through Service Providers viz. HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and Bill Desk. Premium payment can also be made through ATMs of Corporation Bank and UTI Bank. Premium payment can also be made through Electronic Clearing Service (ECS) which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur, Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum. A policyholder having an account in any Bank which is a Member of the local Clearing House can opt for ECS debit to pay premiums. The policyholders wishing to use this system would have to fill up a Mandate Form available at our Branches/DO and get it certified by the Bank. The certified Mandate Forms are to be submitted to our BO/DO.

34

Policy can be anywhere in India Citibank Kiosks at Industrial Assurance Building, Church gate, New India Building, Santa Cruz, Jeevan Shikha Building, Borivili are dedicated for collection of premiums through cheques. Policy Status Where Available Status of your policy indicates if your policy is in force or has lapsed due to nonpayment of premium. It also provides other important information with respect to your policy, for your reference. The status of your policy is available at the branch that services your policies. It is also available through our Interactive Voice Response Systems in select cities In cities connected by our computerized networks the status will be available in any of the branches. Now the policy status of policies being serviced in the cities connected by network are also available through Internet In select cities online touch screen kiosks are also provided where you can view your policy status.

Revival of Lapsed Policies If your policy has lapsed due to non-payment of premiums within the due date, the terms and conditions of the policy contract are rendered void, till you revive your policy. A lapsed policy has to be revived by payment of the accumulated premiums with interest as well as giving the health requirements as required. Always keep your policy in force to ensure that your family gets their financial protection assured by your policy. However certain concessions dependent on the term for which you have paid the premiums are available with the exception of some plans for claims concession.

35

Availing Loans on Policies Many of our plans are of endowment type and you would be allowed to raise a loan against your policy should you require funds. You repay the loan with interest or continue paying the interest and allow the loan to be deducted at the time of the claim payments. Further loans on policies are also allowed after deduction of earlier out standings Most financial institutions too allow loans against LIC policies based on the value LIC quotes on request from you.

Surrender Value This is the value which is the amount payable to you should you decide to discontinue the policy and encash the same from LIC. Surrender value is payable only after three full years premiums are paid to LIC. More over if it is a participating policy the Bonus get attached to it as per prevalent rules. Surrender of policy is not recommended since the surrender value would always be proportionately low. Should you decide to go in for insurance at this stage further insurance would be available to you at a much higher premium because your age would have advanced since taking out the earlier policy.

36

INFORMATION TECHNOLOGY IN LIC

IT policy flows from the business and social objectives. IT usage covers all business activities of the organization. This includes finance, investment, product development, actuarial, underwriting, customer relationship management,

marketing, policy servicing, human resource development, office servicing, and estate management. Its role is not to automate processes. Rather, it is a strategic tool to simplify procedures and revamp processes. This helps create a very efficient customer service management system. It not only provides anywhere, any time service, it also provides greater accountability, transparency and responsiveness in all business processes. In todays world, IT is a must for any industry to keep pace with the customers changing expectations. This is especially relevant in the service industry. The insurance sector has to ensure that the technology it chooses does not lag behind where customer expectations are concerned. In our case, LIC has more than 16crore policy holders. So it has to induct the best IT products available and use them to cater to the needs of the customers and deliver anywhere any time service on demand and to add value to its new products. The trust and the goodwill of the customer gained in the last 50 years have to be consolidated by making all activities more customer-focused. For instance, LIC has a corporate Web site to provide information on products, services, policy status, grievances and premium calculator. Other facilities include touch-screen information kiosksat central locations to provide 24 x 7 inquiry services to customers.

37

CHAPTER 6 DEPARTMENTAL DETAILS OF LIC

The organization having a such a huge size has to have a well defined hierarchical structure and LIC is not an exception to this fact. A well defined proper organization structure with officials with exact knowledge of their duties is a must for an organization to prosper. LIC has a vast network of offices across the length and breadth of our country and abroad so it has defined and maintained its organizational structure in the following way. LIC has its main central head office at Yogaakshema Jeevan bimamarg at Mumbai. Then it is followed by eight zonal offices namely central zone, eastern zone, east central zone, northern zone, north central zone, southern zone, south central zone, western zone respectively. After these eight zonal offices there are several divisional offices under each zonal office and these divisional offices are mostly in each big city. At last comes the branch office and there are several branch offices under each divisional office. At all the branch offices there is a branch manager and several departments and the major function of these branch offices is sales and servicing of the policies. In a branch office the top most is a branch manager and under his control are seven different departments with each of these departments functioning independently to each other. These seven departments are as follows :

1. Sales Department This department is mainly concerned with the sale of new policies and is headed by Assistant Branch Manager Sales(ABMS). The internal agent of LIC is the Development Officer who has the job of communicating and training the
38

Free Lancing agents. It is the development officer who continuously encourages the agents to get new business and the income, performance and commission through policy selling comes under the jurisdiction of this department.

2. New Business Department This department performance the very important function of underwriting new policies which are sent to it for authentication. It checks that all the information provided by the customer is true and the proposal form and all other details and proofs are legal. After scrutinizing the new policy it issues the first premium receipts(FPR) and then issues the policy bond. If anything is found insufficient the proposal form is sent back to the sales department to correct the mistake and again submit it.

3. Policy Service Department After the policy bond is issued, the case is passed on to this department to take care of after sales service of the policy. It takes care of the premium dates and if the policy is lapsed then its revival is done by this department. Also if any loan is required by the customer against his/her policy then its approval has to be given from the policy service department only.

4. Accounts Department It is responsible for processing of all the cheques and loans which come to it. The details regarding financial aspects are covered under this department .

39

5. Claims Department All types of claims i.e. survival benefit claim, maturity claim and death claim are settled by this department. In case of death claim if death occurs after three years then no investigation is involved in the settlement process and if it occurs before three years then proper investigation is done and the claim is considered to be an early claim case.

6. Micro Department This department has the all important function of co-ordinating with each department. Each day s business is collected and its four copies are made and one copy is sent to the divisional office, second is submitted to the branch manager, third remains with the incharge of micro department and fourth in the branch office.

7. Office Service Department This department takes care of all miscellaneous tasks of office and dispatch of cheques, loans etc come under the responsibility of this department.

40

Impact of the financial crisis on Life Insurance Corporation

LIC is a public sector insurer and a domestic investor. As such, we are not directly affected by the global financial crisis. However, the volatility in Indian financial market due to the uncertainty in global markets may affect returns we get on our investments. But LIC has an indisputable record of prudently planning its investments and getting the maximum returns on the policyholders money. We will continue to do that in any type of scenario. Why has the new business growth slowed? What will be the impact of the lower growth on LICs performance? Will it affect ratios? Total premium growth of LIC has always been quite stable, even when there are periodical ups and downs in new premium income. Last year, we ended the year with around 10% growth in First Premium income despite several odds. However, the growth in total premium income was quite healthy, indicating better conservation ratio. Our overall expense ratio is the least in the industry. Last year, I was only 11.94%, and it was just 5.56%, excluding the commission. The surplus generated was a record high of Rs16,598.65crore, which enabled us to give higher terminal bonus to our with profit policyholders and to increase dividend to the government. Having said that, I agree that there has been a decline in the new premium in the current financial year. One of the reasons was that after withdrawal of our successful old plans, we did not immediately introduce any new ULIP. Since then, we have launched new products and the response has been very positive and encouraging. Also, we had some issues with the union of development officers, which have been more or less sorted out through series of consultations and discussions. In September, the figures have started picking up, and I am sure, we will recapture the lost ground very soon. Private insurers are growing their
41

market share by growing distribution. LIC is close to saturation level in terms of distribution. How will you retain the market share? It is not accurate to say that LIC has reached its saturation point in terms of distribution, as we are expanding our reach and network. Other insurers are perhaps expanding very fast and the effect is reflected in their balance sheets. We do have constraints of capital and any growth has to be supported by internal accruals only. Hence, we follow the policy of steady and profitable growth and distribute 95% of surplus to our with profit policyholders. Such a practice makes our products better. And I am sure, this will, in the long run, determine who becomes winner in the life insurance market in India. How do you propose to comply with IRDAs decision to cap single company exposure at 10% of a companys capital? First of all, let me say that new regulations are not only about equity exposure, but encompass several other aspects too. Second, these norms are not just LIC-centric, but applicable to the whole industry. Our total assets of more than Rs 8-lakh crore are our legacy built on the basis of earlier regulations and norms under the Insurance Act. We have always followed applicable norms in our operations and we have an impeccable track record of being a prudent investor, keeping in view the best interests of our policyholders. New investment norms have several changes from the earlier one and we are working on them and are in touch with IRDA where we have problems. Will the exposure limit force LIC to divest in blue chips and invest in companies that have a lower credit rating?

42

CHAPTER 7 CASE STUDY OF SWOT ANALYSIS ON LIC

The SWOT analysis involves an in depth study of the strength and weakness of the provided organization and it also provides information to the promoter, consultant, other agencies and helps in long term viability of the project. Strength: It is the oldest and most well experienced player having a Pan India presence. LIC has a strong and very well developed distribution network. It is having a huge consumer base and is evolved as one of the most powerful brands of the country. It has a large product portfolio and claim settlement is easier to get. It has the advantage of government guarantee is accompanied with it. Largest insurance Company in the world in Customer Base (23 crore customers) No.1 insurance company in the world in terms of agency (about 1.1 Million agents) LIC is No.1 insurer in the world in Volume & Sold around 3.75 Cr.Policies in 2007-2008. 2nd Biggest Real Estate Owner next to Indian Railways. LIC is one of the Highest income tax playing Organization. For Financial Year 2007-08, LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax Rs.1292. 15 Cr. Has Highest insurance Professionals ( Club Member agents )

43

 Only 4 countries in the world have more population that LIC`s policy holders. No.1 insurance Company in the world in terms of claims paid. LIC Settles 2.21 claims per second, LIC settled 139 lakhs claims during the year
2007-2008.

Prompt settlement of claims (97% maturity claim settled on or before due date) One of the Lowest outstanding Claim Ratio in the world ( Maturity+S B Claim0.07%)

Advanced Technology-For better Customer Service

Computerized and networked 2048 branch offices and 159 satellite offices
throughout the country. Use of High Tech-WAN,LAN,IVRS & EDMS LIC is second largest PC user in the country. EDMS to make LIC a paperless office- Enabling Policy servicing & payments through all branchs in the country. Premium Payment Facility extended through networked 2048 branches, ECS, ATM's through internet, online portals, collecting bank (Axis Bank), AP online, through SMS, through selected agents, Now LIC Premium can also be paid through. "Suvidha info Serve KIOSKS" all over India. Policy Holder's Portal allow on line access to policy status and other details. Info centre set up in 12 cities for customers to interact easily. Dial-1251 for details.
44

 45 interactive Voice Response System (IVRS) centers all over the country to provide information on policy servicing. Facility is available 24 7, Facility can be availed on following phone Nos. 1251 OR 020-25514248.

Social Strength:
LIC - an institution builder promoting many financial and insurance institutes like NSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, National insurance Academy, insurance institute of India etc. LIC has foreign operations in Mauritius, Fiji and London and has joint venture operating in Sri lanka , Nepal, Bahrain & Saudi Arabia. New offices will be hortlyoprned in Australia, USA & Canada. LIC is known as "Pension Provider" of the country. 1st Pension company in India is floated by LIC as "LIC Pension Fund Ltd" on 21st Nov 2007. First to create waves in micro insurance sector by insuring people below the poverty line. In year 2007-2008, 8.54 lac policies sold through "Jeevan Madhur"Plan. Widest range of plans (about 48) for every need of the customer of 0 to 79 years of age. Biggest Portfolio of Group insurance schemes available. "Jeevan Saral" one of the product of LIC got "Best innovation product " award from I.R.D.A. LIC has covered lick Risk of 1.13 crore citizens through "AAM ADMI BIMA YOJANA" &" JANASHREE BIMA YOJANA". Very Unique Salary saving Portfolio. Highest Number of Corporate Clients in Group insurance Scheme. Expending Distribution Channel through Bancassurances, Corporate Agencies, Broker ship & Chief Life insurarance Advisor (CLIA).
45

 New East - Central Zonal Office opened at patina to cater to the needs of states of Bihar, Jharkhand and Orissa. 5 new Divisional offices were also opened in 200708. Pune D.O. was splited in 2 divisions, viz Pune Division (i) and Pune Division (ii). "Golden Jubilee Foundations" established for undertaking charitable activities like education, health, relief of poverty etc.

People's Money for People's Welfare

LIC invested more than 11,630 crores, in infrastructure sector is Rs.56,691crores In socially oriented sector like water, drainage & housing etc, LIC has invested Rs.5,635crores during 2007-08 & total investment in this sector is Rs.32,321 crores. Total investment in Social Sector Rs.89,000Crs. Different incentive schemes for villages, Schools and Banks under Bima Gram, Bima School and Bima Banks.

Total investment in Nation Building Activities is 5,76,000Crs.

Financial Strengths:
LIC's investment income in 2007-08 was Rs.40,655crores . Out of Total income of Rs,1,76,559.28Crs. Total Assets of the corporation as on 31.3.07 were Rs.6,74,514.78Crs . Largest institutional investor in Share Market. On an average Rs.100 crore invested every day. During the year 2007 LIC earned the profit Rs.10,000Crs. from the Sale of Equity. Largest Financial institutional investor both Equity market & Term House.

46

Weakness: Its employees and other staff are lethargic and least motivated to render prompt and sincere customer service. After sales customer grievance redressal mechanism is inefficient. Agents not taking into account the needs of people and promote policies having high commissions only. Very slow decision making process and internal problems between top management and lower cadre staff. The top management or bosses are mediocre and there is large scale corruption in main office. The development officers and agents who are the foundation pillars of LIC are not provided with extra funds and powers to promote its products aggressively.

Opportunity: Emergence of a huge middle income consumer market in the country. People becoming more aware and demanding so there is scope for a whole lot of innovative products. Pension markets, health insurance and large real estate portfolio. Todays human life becomes full uncertain, so they prefer protection against the risk. Therefore they prefer life insurance. This is the opportunity for the life insurance sector. Easy accesses to development in the more advance market provide further opportunity to upgrade their working.

47

 Technological, financial or specific area based avenues of absorbing improved system are also now more easily available. So, that insurance companies working efficiently and fast service. Increased economic activities: increase in the economic activity has become the opportunity for the life insurance sector. The activity such as development in the automobile industry, development in the shipping industry. The growth in the GDP shows the opportunity for this industry. The growth rate expected this year7-7.5%. So this is also one of the opportunities for the life insurance sector. Uncovered market: The Indian insurance market is the one of the least markets in the world. India has a population 1044.15 million out of which only 77.7 million have a life insurance policy. Almost 300 million people in the country can afford to buy life insurance but of this only 20 % have an insurance cover. Thus there lies a big opportunity for the life insurance industry. To enter into rural market where customer awareness about insurance is low by effective and efficient marketing strategies. To sell insurance products through electronic Medias. Natural calamities: natural calamities taking place now days have created a concern for life insurance among the public. Because of natural calamities like earth quake, flood, and cyclone people have become conscious about benefits and need of insurance. Growing population: the growth in the population (approximately 1.7%) is very high. It is said that one Australia is added in our country every year. Thus potential customers for the life insurance industry. It has become an opportunity for the life insurance industry.
48

 The lack of comprehensive social security system combined with a willingness to save means that Indian people demand for pension products will be large. Thus, it has become an opportunity for the life insurance industry. India has traditionally been a highly savings oriented country. Needless to say, if the insurance market is properly tapped, it is possible to raise life insurance premium as a percentage of GDP from its existing level. Thus, it has become an opportunity for the life insurance industry. To use Internet and e-commerce technologies to dramatically cut the costs and/ or to pursue new sales-growth opportunities. With the help of technology it has become easy for the companies to reach the customer quickly, easily, efficiently and in a better way. Also the companies can cut down the cost of operation up to considerable level. Thus technology has thrown lots of opportunity for the company. Liberalized government policy toward insurance sector: the government has liberalized the government policy in the life insurance sector. Now a day role of government has changed. Due to liberalized policy of government the country is benefited in earning foreign inflows: the domestic company can also collaborate with foreign country and can create synergy. Thus there is great opportunity for those who can trap it. Exist the option of joint venture& alliance etc. for companies to create Synergy, value as well as competitive capabilities for the firms.

49

Threats: Private entrants are naturally targeting the profitable and more lucrative segments, by providing better service, new products and flexibility. They are targeting the bigger corporate the other clients in the well established metropolitan center. These new entrants succeeded in eating share of the existing entities. This creates threat among rival firms itself. Decreased in bank rate: the decreased bank rate is the biggest threat for the life insurance sector. Fluctuation in the bank rate makes big difference for the life insurance industry. It has become threats for the life insurance industry. Interest rate of P.F and bank saving create threat to insurance sector. All other saving is obviously the threat for life insurance sector. Increasing intensity of competition among industry rivals-may cause squeeze(fall) on profit margins. Consumers education- consumers are more and more confused because the market players are offering large number of product range. As at present the awareness level is not much, it is only because the education level is only 62 %( in which only 10% are well educated). Fraud in insurance sector: the major problem fraud, which affects the life insurance sector. The flight of talent to new entrants is already in evidence, and could be on the rise for some time to come. Retaining qualified and competent executives will be considerable challenges for existing companies. One very serious danger that the government on units is likely to face is that even if at some point of time, the government does decide to disinvest a

50

portion of its equity; they may not be fully free from government interference. They could face a peculiar problem that although paper and in terms of legal definition they would not be public sector units. In effects, their working could be no different from what it was before their ownership pattern change. This could be genuine threats since they would be competing with units which are free from such artificial and unnecessary restrictions. The new units, equipped with state of arts equipment and innovative procedure would have an in-built edge over the erstwhile public sector units, which until recently had no such opportunity and incentives. Due to possible negative impact on employment, there were no serious efforts at updating technology and equipment. The resultant inadequate investment in infrastructure could lead to their lagging behind in the race.

51

CHAPTER 8
QUESTIONAIRE AND FINDINGS

QUESTIONNAIRE ANALYSIS Respondents = 80 Respondents Responded = 60 ResponseRate=75% Respondents are taken from private, government and business sectors.

1. According to you, which have played a major role in the field of life insurance companies?

private employees LIC HDFC ICICI 10 5 3

govt. employees 13 3 3 1
52

businessman 10 5 4 1

OTHERS 2

14 12 10 8 6 4 2 0

private employees govt. employees businessman

I DF C IC IC

LI C

After analyzing this data it is found that from the given three respective level of Pvt. Govt. and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out of 20 (30%) are in favour of LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and 5 out of 20 (6%), 1 out of 20 (30%) and 1 out of 20 (30%) are in favour of other Pvt. Companies.

2.Which insurance companies have been successful to make strong public base by advertisement?

Private employees LIC HDFC ICICI 12 3 4

O TH

ER

Govt employees 14 2 3 1

Business man 12 4 3 1

OTHERS 1

53

16 14 12 10 8 6 4 2 0
IC IC I LI C FC O TH ER HD S

Private employees Govt employees Business man

From the above table, it is found that from the given three sector Private, Govt. and Business 12 out of 20 (36%), 14 out of 20 (42%), 12 out of 20 (36%), are in the favour of LIC. 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favour of HDFC, whereas only 1 out of 20 (3%), 1 out of 20 (3%) 1 and out of 20 (3%) favour others company.

3. Which insurance company has gained massive public support in the current fiscal year?

Private employees LIC HDFC ICICI 12 3 3

govt. employees 14 2 2 2 businessman 10 5 4 1

OTHERS 2

54

14 12 10 8 6 4 2 0 LIC HDFC ICICI others Private employees govt. employees businessman

From the above table, it is found that from the given three sector Private, Govt. and Business 12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%), are in the favour of LIC 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favour of ICICI, whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 and out of 20 (3%) favour others company.

4.Do you think insurance policy is in the direction of public welfare?

Private employees YES NO 13 7

Govt. employees 16 4 Businessman 12 8

55

20 15 10 5 0 Private employees Govt. employees Businessman

YES NO

The above table shows that from private sector 13 out of 20 (30%) agree and 7 out of 20 (21%) disagree, from govt. sector 16 out of 20 (48%) think it right but 4 out of 20 (12%) dont thick it so and from business man 12 out of 20 (36%) are in favour of the above statement but 8 out of 20 (24%) dont favour it.

5.Is retirement bond or pension policy launched by the number of private player as well as public sector Company in the direction of secured old age?

Private employees YES NO 15 5

Govt. employees 18 2 Businessman 13 7

56

20 15 10 5 0 Private employees Govt. Businessman employees YES NO

It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%) and 13 out of 20 (39%) from the given three think retirement bend or pension policy a legitimate step in the direction of secure old age but 5 out 20 (15%), 2 out of 20 (6%) and 7 out 20 (21%) dont agree with the opinion of the majority class.

6. Do you think that risk coverage factor included in Insurance policy attracts general public towards the policy?

Private employees YES NO 12 8

Govt. employees 16 4 Businessman 11 9

57

25 20 15 10 5 0
Businessman Private employees Govt. employees

NO YES

From the above table it is found that 12 out of 20 (36%) from Private sector 16 out of 20 (48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor attractive but rest 8 out of 20 (24%), 4 out of 20 (12%) and 9 out 20 (27%) from the above them sector dont think it so encouraging towards saving trend whereas 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so. 7. What according to you, the term plan that only covers risk and doesnt cover maturity benefit on survival at the end of the term provides security cover over policy holders or a smart way of accumulative money from policy holders?

Private employees security cover accumulative money 8 12

Govt. employees 16 Businessman 11

4
58

20 15 Security Cover 10 5 0 Private Govt Business employees employees man Accumulative Money

It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector, 15 out of 20 (45%) from Govt. sector and 12 out of 20 (36%) think term plan as a security cover but 9 out of 20 (27%), 5 out of 20 (15%) and 8 out of 20 (24%) from the three respective group think it as a way of accumulating money insurance company.

8. Do you think that the arrival of so many private companies in this insurance sector envisage a lot of choice to policy holder?

Private employees YES NO 16 4

Govt. employees 18 2 Businessman 16 4

59

20 15 10 5 0 YES NO Private employees Govt. employees Businessman

From analyzing the above data it is found that 16 out of 20 (48%) from Pvt. Sector, 18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival of private players envisage a lot of choice to policy holder. But 4 out of 20 (12%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.

9.Do you agree that customer-centricity and transparency are the buzzwords for success in this evolving industry?

Private employees YES NO 18 2

Govt. employees 20 0 Businessman 19 1

60

20 15 10 5 0 YES NO Private employees Govt. employees Businessman

From this above data, it is found the 18 out of 20 (54%) from Pvt. Sector and 20 out of 20 (60%) from Govt. Sector 19 out of 20 (57%) from Business men agree with this statement whereas only 2 out of 20 (6%) from Pvt. Sector and 1 out of 20 (3%) from Business men do not agree with this statement.

61

MAJOR COMPETITIORS OF LIC

BAJAJ ALLIANZ

Bajaj Allianz Life Insurance is a union between Allianz SE, one of the largest Insurance Company and Bajaj Finserv. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a Trillion (Over INR. 55, 00,000 Crores). Allianz SE has over 115 years of financial experience and is present in over 70 countries around the world. At Bajaj Allianz Life Insurance, customer delight is our guiding principle. Our business philosophy is to ensure excellent insurance and investment solutions by offering customised products, supported by the best technology.

Accelerated Growth Fiscal Year No. of policies sold New Business in FY Rs. 7 cr.

2001-2002(6 mths) 21,37 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 1,15,965 1,86,443 2,88,189 7,81,685 20,79,217 37,44,742

Rs. 63.3 cr. Rs. 180 cr. Rs. 857 cr. Rs. 2,717 cr. Rs. 4,302 cr. Rs. 6,674 cr.

62

ICICI PRUDENTIAL

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank one of India's foremost financial services companies-and Prudentialplc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of 2074 branches (inclusive of 1,116 micro-offices), over 225,000 advisors; and 7 bancassurance partners. ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India.

63

CHAPTER 9 RECOMMENDATIONS
In the modernized well advanced hi-tech approach to the customer every possible facilities and effort to build up the confidence of the rising policy holders towards. Insurance companies, to complete one another nothing is left to recommend. But some recommendations that are intensely felt and highly required for insures to sustain in the market.

These are as follows: a) More and more transparency should be ascertained between insurers and policy holders.

b) Particularly, in the emerging boom in the insurance company, every insurance company should be customer centered, and well versed in the handling of problem and grievances of the policy holders.

c) Each and Every product launched by the Insurance company should be in favour of increasing need of policy holders.

IRDA should be more and more responsible to the insurance sector by determining some standard. It should be mandatory to every insurers to make more and more responsible and responsive to the policy holders so that comprehensive understanding may be developed among policy holders. It may be beneficial on both sides.

64

CONCLUSION
The concept behind insurance is that a group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. In case a person actually suffers a loss on account of such risk, he is compensated out of the same pool of funds. Contribution to the pool is made by a group of people sharing common risks and collected by the insurance companies in the form of premiums. LIC business spread out across the globe. To sustain itself it must promote its products through advertising and improve its selling techniques. Customers must be aware of the new plans available at Aviva LIC. There is very tough competition among the insurance companies. The entry of more insurance companies has expanded the product segment to meet the different to the customers. LIC has vast market and very firm grip on its traditional customers and monopoly of life insurance products.

65

BIBLIOGRAPHY
Yogkshem LIC Magazine Outlook Express Business today Finance & Banking

WEBLIOGRAPHY
www.licindia.com www.indiainfoline.com www.iciciprulife.com www.hdfc.com

66