INTRODUCTION

The story of insurance is probably as old as the story of mankind. Tendency of a human being to secure themselves against loss and disaster has been from the starting of world. They sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years as per records.

Functions of insurance:
Provide Protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain. Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. Means of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance.

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 Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover. Insurance is divided into two basic zones: General Insurance Life insurance

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

The Non Life Insurers:

National Insurance Co. Ltd New Indian Assurance Co. Ltd Oriental Insurance Co. Ltd United India Insurance Co. Ltd Tata AIG General Insurance Co. Ltd Bajaj Allianz General Insurance Co. Ltd IFFCO Tokio General Insurance Co. Ltd ICICI Lombard General Insurance Co. Ltd Reliance General Insurance Co. Ltd
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 Royal Sundaram Alliance Insurance Co. Ltd Bharti Axa General Insurance HDFC Chub

LIFE INSURANCE
Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a premium paid undertakes to pay a fixed sum of money on the death of the insured or on the expiry of a specified period of time, whichever is earlier. In case of life insurance, the payment for life insurance policy is certain. The Event insured against is sure to happen only the time of its happening is not known. So life insurance is known as Life Assurance. The subject matter of insurance is life of human being. Life insurance provides risk coverage to the life of a person. On death of the person insurance offers protection against loss of income and compensate the titleholders of the policy.

Roles of Life Insurance

Life insurance as an investment: Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies. Life insurance as risk cover: Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide. Life insurance as tax planning: mechanism too. Insurance serves as an excellent tax saving

Importance of Life Insurance

Protection against untimely death: Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving for old age: After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. Promotion of savings: Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to
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keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy. Initiates investments: Life Insurance Corporation encourages and mobilizes the public savings and channelizes the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings. Credit worthiness: Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business. Social Security: Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future. Tax Benefit: Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.

INDIAN INSURANCE INDUSTRY

HISTORY: Life insurance came to India from England in 1818 when oriental life insurance company started in Calcutta by Europeans. After this many insurance companies had been started in India. But these companies were looking after only the needs of European community established in India. Indian people were not being insured by these companies. First Indian life insurance company came as Bombay mutual life insurance assurance. Second company was Bharat insurance company came in 1896. After this the united India in Madras, national Indian and national insurance in Calcutta and the co-operative assurance in Lahore were established in 1906. To regulate Indian insurance business first insurance act came in 1912 as life insurance company act and provident fund act. These acts consist of premium rates tables and periodical valuations of companies. In the first two decade of 20th century many life insurance companies were started. So the insurance act came in 1938 to governing life and non life insurance companies and to provide strict state control. In 1956 the life insurance business in India was nationalized. In 1956 life insurance corporation of India (LIC) was created to spreading life insurance much more
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widely particularly in rural areas. In that year LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. In 1957 the business of LIC of sum assured of 200crores, 1000crores in 1970, and 7000crores in 1986.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:

In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.

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

Changing perception of Indian customers:

Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers.

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For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and was practically forced onto consumers on a Take -it-As-it-basis. All that got changed with passage of IRDA act in 1999. New insurance companies have come into existence leading to open competition and hence better products for customers. Indian customers have become very sensitive to Coverage / Premium as well as the Products (read Risk Solution), that is given to them. There are not ready to accept any product, no matter even if that is coming from the market leader, should that product is not serving the purpose. A case in point is ULIP Product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the Non-life segment are new age Avatar. The new products are constantly being demanded by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond. Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now Indian customers are aware of insurance industry and insurance products provided by companies. They have become more sensitive. They would not accept any type of insurance product unless it fulfills their requirements and needs. In historic days customers looking at insurance products as a life cover which can provide security against any unacceptable events, but now customers look at insurance products as an investment as well as life cover. So todays customers wants good return from the insurance companies. The Indian customers forms the pivot of each companys strategy.

Changing face of Indian insurance industry:

After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. Previously there was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the only life-insurance company for the people till 2000. L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of private life insurance companies there is a great competition in Indian market now. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. Today life-insurance is not only limited up to just life risk cover and maturity period bonuses but changed to greater return from the investments. With the introduction of the unit linked insurance policies these companies are investing the money in different investment instruments
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like shares, bonds, debentures, government and other securities. People are demanding for higher returns with the life risk cover and private companies are giving 30-40% average growth per annum.

These life-insurance companies have every kind of policies suiting every need right from financial needs of, marriage, giving birth and rearing up a child, his education, meeting daily financial needs of life, pension solutions after retirement. These companies have every aspects and needs of our life covered along with the deathbenefit.

In India only 25% of the population has life insurance. So Indian life-insurance market is the target market of all the companies who either want to extend or diversify their business. To tap the Indian market there has been tie-ups between the major Indian companies with other International insurance companies to start up their business. The government of India has set up rules that no foreign insurance company can set up their business individually here and they have to tie up with an Indian company and this foreign insurance company can have an investment of only 24% of the total start-up investment. Indian insurance industry can be featured by: Low market penetration. Ever growing middle class component in population. Growth of customers interest with an increasing demand for better insurance products. Application of information technology for business. Rebate from government in the form of tax incentives to be insured. Today, the Indian life insurance industry has more than a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. The success of their effort is that they have captured over 28% of premium income in five years. The biggest beneficiary of the competition among life insurers has been the customer. A wide range of products, customer focused service and professional advice
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has become the mainstay of the industry, and the Indian customers forms the pivot of each companys strategy. Penetration of life insuran ce is beginning to cut across socioeconomic classes and attract people who have never purchased insurance before.

Life insurance is also now being regarded as a versatile financial planning tool. Apart from the traditional term and saving insurance policies, industry has seen the entry and growth of unit linked products. This provides market linked returns and is among the most flexible policies available today for investment. Now products are priced, flexible, and realistic and sustain so people in better position to understand the risk and benefits of the product and they are accepting these innovative products. So it is clear that the face of life insurance in India is changing, but with the changes come a host of challenges and it is only the credible players with a long term vision and a robust business strategy that will survive. Whatever the developments, the future and the opportunities in this industry will surely be exciting. The number of companies in Insurance particularly in Life Insurance has changed drastically now the number is in 18. List of them are mentioned as below: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. ICICI Prudential Life Insurance Metlife India Insurance Co. Ltd. TATA AIG Life Insurance Max New York Life Insurance AVIVA Life Insurance Bharti AXA Life Insurance Kotak Mahindra Life Insurance Reliance Life Insurance SBI Life Insurance HDFC Standard Life Insurance Birla Sun Life Insurance Sahara Life Insurance ING Vysya Life Insurance

Possibilities for insurance companies in India:

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

GLOBAL INSURANCE INDUSTRY

Globally, insurers increasingly are pressured by the demands of their clients. The development of global insurance industry over the past few years was influenced by booming stock markets which enabled considerable capital gains to be made in non life business. Increase in insurers equity capital increased underwriting capacity, while demand did not develop at the same pace, resulting in decrease in insurance policies prices. The stock market boom of the past few years led to demand for unit linked insurance products. The global insurance industry is growing at rapid pace. Most of the markets are undergoing globalization. Lot of mergers and acquisition are taking place in the insurance world. The rapidity in the industry, technological improvement has resulted in pressures on a few economic parameters. The world insurance industry is at peak of its globalization process. Global insurance market is increasing by an average of six percent per year since 1990. Insurance companies have collected $2443.7 billion premium worldwide according to the global development of premium volume in 144 countries in 2005. $1521.3 has been generated as life insurance premium and $922.7 as non life insurance premium. The US accounted for 35% of global life and non life premium, Japan had global share of 21%, and UK was having 10% of global share.

Influence on Indian Insurance Industry:

In this era of globalization, insurance companies face a dynamic global environment. Dramatic changes are taking place owing to the internationalization of activities, appearance of new risk, new types of covers to match with new risk situations, and unconventional and innovative ideas on customer services. Low growth rates in developed markets, changing customers needs, and the uncertain economic conditions in the developing world are exerting pressure on insurers resources and testing their ability to survive. Now the existing insurers are facing difficulties from nontraditional competitors those are entering the retail market with new approaches and through new channels.
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India has a rapidly growing middle class and this section can afford to buy insurance products. This shows the attraction that the Indian market holds for foreign insurers who have been putting pressure on developing countries as well as on India to open up its market.

Life Insurance Penetration as a % of GDP

United Kingdom Japan Korea United States Malaysia India China Brazil 8.9 8.3 7.3 4.1 3.6 3.0 1.8 1.3

INSURANCE AND ECONOMY

Indian economy is growing in reference to global market. Business of insurance with its unique features has a special place in Indian economy. It is a highly specialized technical business and customer is the most concern people in this business, therefore this business is able to spur the growth of infrastructure and act as a catalyst in the overall development of Indian economy. The high volumes in the insurance business help spread risk wider, allowing a lowering of the rates of the premium to be charged and in turn, raising profits. When there is a bigger base, the probabilities become more predictable, and with system wide risks balanced out, profits improve. This explains the current scenario of mergers, acquisitions, and globalization of insurance.

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 Insurance is a type of savings. Insurance is not only important for tax benefits, but also for savings and for providing security. It can be serving as an essential service which a welfare state must make available to its people. Insurance play a crucial role in the commercial lives of nations and act as the lubricants of economic activities. Insurance firms help to spread the potentially financial consequences of risk among the large number of entities, to mobilize and distribute savings for productive use, facilitate investment, support and encourage external trade, and protect economic entities against external risk. Insurance and economic growth mutually influences each other. As the economy grows, the living standards of people increase. As a consequence, the demand for life insurance increases. As the assets of people and of business enterprises increase in the growth process, the demand for general insurance also increases. In fact, as the economy widens the demand for new types of insurance products emerges. Insurance is no longer confined to product markets; they also cover service industries. It is equally true that growth itself is facilitated by insurance. A welldeveloped insurance sector promotes economic growth by encouraging risk-taking. Risk is inherent in all economic activities. Without some kind of cover against risk, some of these activities will not be carried out at all. Also insurance and more particularly life insurance is a mobilizer of long term savings and life insurance companies are thus able to support infrastructure projects which require long term funds. There is thus a mutually beneficial interaction between insurance and economic growth. The low income levels of the vast majority of population have been one of the factors inhibiting a faster growth of insurance in India. To some extent this is also compounded by certain attitudes to life. The economy has moved on to a higher growth path. The average rate of growth of the economy in the last three years was 8.1 per cent. This strong growth will bring about significant changes in the insurance industry. At this point, it is important to note that not all activities can be insured. If that were possible, it would completely negate entrepreneurship. Professor Frank Knight in his celebrated book Risk Uncertainty and Profit emphasized that profit is a consequence of uncertainty. He made a distinction between quantifiable risk and nonquantifiable risk. According to him, it is non-quantifiable risk that leads to profit. He wrote It is a world of change in which we live, and a world of uncertainty. We live only by knowing something about the future; while the problems of life or of conduct at least, arise from the fact that we know so little. This is as true of business as of other spheres of activity. The real management challenges are uninsurable risks. In the case of insurable risks, risk is avoided at a cost.

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FUNCTIONING OF INSURANCE INDUSTRY

Insurers Business Model: Profit = Earned Premium + Investment Income Incurred Loss Underwriting expenses Insurers make money in two ways: 1. Through Underwriting, the processes by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks, and 2. By investing the premiums they collect from insured.

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The most difficult aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk.

Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. An insurer's underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss. Insurance companies also earn investment profits on float. Float or available reserve is the amount of money, at hand at any given moment that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out. Naturally, the float method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards. So a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the "underwriting" or insurance cycle. Finally, claims and loss handling is the materialized utility of insurance. In managing the claims-handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages.

Investment Management:
Investment operations are often considered incidental to the business of insurance, and have traditionally viewed as secondary to underwriting. In the past risk management was the most important part of business, whereas today the focus has shifted to fund management. Investment income is a large component of insurance revenues, skilful and careful management of funds. Insurance is a business of large
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numbers and generates huge amount of funds over time. These funds arise out of policyholder funds in the case of life insurance, and technical and free reserves in the non-life segments. Time lag between the procurement of premium and the payment of claim provides an interval during which the funds can be deployed to generate income. Insurance companies are among the largest institutional investors in the world. Assets managed by insurance companies are estimated to account for over 40% of the worlds top ten asset managers. Returns on investments influence the premium rates and bonuses and hence investment income will continue to be an important component of insurance company profits. In life insurance, benefits from insurance profits accrue directly to policy holders when it is passed on to him in the form of a bonus. In non life insurance the benefits are indirect and mostly by the creation of an investment portfolio. Investment income has to compensate for underwriting results which are increasingly under pressure. In the case of insurance, the difference between revenue and the expenses is known as operating surplus. Revenue = Premium Expenses = (Sum of Claims + Commission payable on procurement of business + Operating expenses) Operating Surplus = (Revenue Expenses) Net investment income includes income from trading in and holding stock market securities including government securities, special deposits with the central government, loans to several public utilities and service providers in state government. Insurance premium collected is converted in a pool of fund then divided in to four expenses. To pay the expenses of the management To pay agency commission To pay for the claims Surplus money will be invested in govt. securities

Requirements of an insurance risk

Insurance normally insure only pure risks .However, not all pure risk is insurable .certain requirements usually must be fulfilled before a pure risk can be privately insured .From the view point of the insurer, there are ideally six requirement of an insurable risk:
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 There must be a large number of exposure units The loss must be accidental and unintentional The loss must be determinable and measurable The loss should not be catastrophic The chance of loss must be calculable The premium must be economically feasible

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Comparison of Insurance with other Similar Factors

1. Insurance and Gambling compared Insurance is often erroneously confused with gambling .There are two important differences between them .First , gambling creates a new speculative risk ,while insurance is a technique for handling an already existing pure risk .thus ,if you bet Rs 300 on a horse ,a new speculative technique is created ,but if you pay Rs 300 to an insurer for fire insurance ,the risk of fire is already present and is transferred to the insurer by a contract. No new risk is created by the transaction. The second difference between insurance and gambling is that gambling is socially unproductive, because the winners gain comes at the expense of the loser .In contract; insurance is always socially productive, because neither the insurer nor the insured is placed in a position where the gain of the winner comes at the expense of the loser. The insurer and the insured have a common interest in the prevention of a loss. Both parties win if the loss does occur .Moreover, consistent gambling transaction generally never restore the losers to their former financial position .In contract ,insurance contracts restore the insureds financially in whole or in part if a loss occurs. 2. Insurance and Hedging compared The concept of hedging is to transferring the risk to the speculator through purchase of future contracts .An insurance contract, however, is not the same thing as hedging .Although both technique are similar in that risk is transferred by a contract, and no new risk is created, there are some important difference between them. First, an insurance transaction involves the transfer of insurable risks, because the requirement of an insurable risk generally can be met .However, hedging is a technique for handling risks that are typically uninsurable ,such as protection against a decline in the price agriculture products and raw materials. A second difference between insurance and hedging is that insurance and hedging is that insurance can reduce the objective risk of an insurer by application of the law of large numbers. As the number of exposure units increases, the insurers prediction of future losses improves, because the relative variation of actual loss from expected loss will decline .thus, many insurance transactions reduce objective risk. In contract, hedging typically involves only risk transfer , not risk reduction .The risk of adverse price fluctuation is transferred because of superior knowledge of market conditions .The risk is transferred, not reduced, and prediction of loss generally is not based on the law of large numbers.

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Various types of life insurance policies:

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

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DISTRIBUTION OF INSURANCE PRODUCTS

Insurance has to be sold the world over. The Touch point with the ultimate customer is the distributor or the producer and the role played by them in insurance markets is critical. It is the distributor who makes the difference in terms of the quality of advice for choice of product, servicing of policy post sale and settlement of claims. In the Indian market, with their distinct cultural and social ethics, these conditions will play a major role in shaping the distribution channels and their effectiveness. In today's scenario, insurance companies must move from selling insurance to marketing an essential financial product. The distributors have to become trusted financial advisors for the clients and trusted business associates for the insurance Companies. Challenges for insurance companies and intermediaries in India Building faith about company in the mind of clients. Building personal credibility with the clients.

Different distribution channels in India:

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

ASSOCIATE BANKS ICICI Bank, Bank of India, Citibank, Allahabad Bank, Federal Bank, South Indian Bank, Punjab and Maharashtra Cooperative Bank Panjab National Bank, Karnataka Bank, J&K Bank Deutsche Bank, Citibank, Rajasthan, Andhra Bank Vysya Bank ABN Amro Bank, Canara Bank HDFC Bank, Union Bank, Indian Bank State Bank of India Bank of

Met Life

Birla Sun Life

ING Vysya Bank Aviva Life Insurance HDFC Standard Life SBI Life

Brokers: Now a days different financial institution are selling insurance. These financial institutions are known as brokers. They are taking some underwriting charges from the insurance companies to sell their insurance products. Corporate agents: Corporate agency is a cross selling type of channel. Insurance companies tie-up with business houses in other industries to sell insurance either to their employees or their customers. Insurance industry, during the past 2 years has witnessed a number of such strategic tie-ups and alliances. Corporate agents have become a major force to reckon with in distributing insurance products. Such asBajaj Allianz tied up with Maruti Udyog and Ford for auto insurance and Tata AIG life has tied up with Tata tea, Khaitans Williamson major and bridge foundation for selling rural policies. Internet: In this technological world internet is also a channel of selling insurance. This can be as direct marketing.

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EFFECTIVE MARKETING STRATEGIES FOR INSURANCE PRODUCTS

Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now days an insurance manager requires leadership, commitment, creativity, and flexibility. "Every family in every village in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager. Financial, marketing and human resource polices of the corporations influence the unit mangers to make decisions. Performance of insurance company depends on the effectiveness of such policies. Insurance corporations formulate and revise these policies from time to time to ensure that the performance of the managers is best for the organization. In the competitive market, insurance companies are being forced to adopt a strictly professional approach in marketing. The insurance companies face the challenge of changing the uninspiring public image of the industry. Some of the important marketing elements are Marketing mix. The importance of relationship. Positioning. Value addition. Segmentation. Branding. Insuring service quality. Effective pricing. Customer satisfaction research.

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The growth of insurance sector is governed largely by factors external to it. The following factors influence the market and demand of product Government policies. Growth in population. Changing age profile. Income wise distribution of the population. Level of insurance awareness. The pricing of the policies. The economic climate of the country. The aversion to risk. Social and political features of the country. Growth scenario in the world. Different companies adopt different approaches in their marketing strategies. One approach is focus upon product quality which can give confidence in the mind of customers that they are offered by best featured products. And other approach is focusing on customers needs, which involve a heavy investment in developing relationships with policyholders. Under this approach customer can expect a range of products and service offered to him. Third approach is market segmentation under which the population can be divided into several homogeneous products and groups, the effort should be tie clients to the company by customized combination of coverage, easy payment plans, risk management advice, and convenient and quick claim handling. An insurance product can be classified into three phases: Core product: In insurance industry the core product is the policy that provides protection to the customers. Expected product: Because of competition customers start to expect more from an insurance product. Then insurance companies provide some tangible attributes in their product to differentiate from competitors, such as Brand Some additional features in existing product By providing instruction manual with the policy

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Augmented product: An insurance company can provide different types of services to differentiate their products Post sales services. Branches in different places for customers. Customer complaint management. Payment option convenient to customers. The entry of private players and their foreign partners has given domestic players a tough time, because the opening up of the sector has not brought in only foreign players, but also professional techniques and technologies. The present scene in India is such that everyone is trying to put in the best efforts. There are marketing strategies more for survival than growth. But the most important gift of privatization is the introduction of customer-oriented services. Utmost care is being taken to maximize customer satisfaction.

Success of an insurance company depends on four important functions:

Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis. Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents. Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving overall efficiency in operations. The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations. Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, companys market share, increase in number of branches and divisions etc. Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness. Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provides measures of efficiency of a unit as well as the organization. Investment control and expense control are dealt separately and the effectiveness of managements decisions at various levels is to be assessed separately.

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To find best prospects:

Allocating marketing strategies against market potential. Estimating potential for specific products within local markets. Identifying high opportunity areas. Measuring agency performance relative to market potential. Optimizing your agency network against market potential.

Attributes to develop marketing strategies:

Channel data: - Useful to know future buying preferences, learning about products and purchase channels. Consumer attitudes. Consumption data: - Useful to evaluate annual premiums, number of annuities owned, value of annuities, and with which company the current policy is held.

Effective Strategies for Insurance Agents:

Learn how to construct a mental image for success. Learn how to find a proper perspective and how to turn off all the signals that cause people not to buy from you. Learn how to get and set more appointments. Learn how to convert a new lead into sales. Learn how to act when you meet a client for the first time. Learn how the order in which you explain the types of policies can double your income. Take Easy steps to avoid delays in issuing policies.

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INVESTMENT
Investment is putting money into something with the hope of profit. More specifically, investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, income dividends, or appreciation capital gains of the value of the instrument. It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization, such as a pension fund, after some in the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business. In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability also change. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets. The basic meaning of the term being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset per se. The term "investment" is used differently in economics and in finance. Economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial asset, such as money that is put into a bank or the market, which may then be used to buy a real asset.

In economics or macroeconomics
In economic theory or in macroeconomics, investment is the amount purchased per unit time of goods which are not consumed but are to be used for future production. Examples include railroad or factory construction. Investment in human capital includes costs of additional schooling or on-the-job training. Inventory investment refers to the accumulation of goods inventories it can be positive or negative, and it can be intended or unintended. In measure national income and output gross investment (represented by the variable I) is also a component of Gross domestic product (GDP), given in the formula GDP = C + I + G + NX, where C is consumption, G is government spending, and NX is net exports. Thus investment is everything that remains of total expenditure after consumption, government spending, and net exports are subtracted (i.e. I = GDP C - G - NX).

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Non-residential fixed investment (such as new factories) and residential investment (new houses) combine with inventory investment to make up. Net investment deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year. Fixed investment, as expenditure over a period of time ("per year"), is not capital. The time dimension of investment makes it a flow. By contrast, capital is a stock that is, accumulated net investment to a point in time (such as December 31). Investment is often modeled as a function of Income and Interest rates, given by the relation I = f(Y, r). An increase in income encourages higher investment, whereas a higher interest rate may discourage investment as it becomes more costly to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than lending out that amount of money for interest. Investment related to business of a firm - business management The investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). Assets are used to produce streams of revenue that often are associated with particular costs or outflows. All together, the manager must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business. In terms of financial assets, these are often marketable securities such as a company stock (an equity investment) or bonds (a debt investment). At times, the goal of the investment is to produce future cash flows, while at others it may be for the purpose of gaining access to more assets by establishing control or influence over the operation of a second company (the investee). Business firms or organizations raise funds from investors in the form of equites, debts (collectively known as the capital structure) and further reinvest it into various investment schemes by carefully analyzing the returns in order to meet out their obligations relating to purchase of assets which provides them long term benefits. Putting money into something with the hope of profit. More specifically investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest. Income (dividends) or appreciation (capital gains) of the value of the instrument It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization,
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such as a pension fund, after some. On the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business. In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability also change. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pocket. The basic meaning of the term being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset per se. The term "investment" is used differently in economics and in finance. Economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial asset, such as money that is put into a bank or the market, which may then be used to buy a real asset. In economic theory or in macroeconomics investment is the amount purchased per unit time of goods which are not consumed but are to be used for future production. Examples include railroad or factory construction. Investment in human capital includes costs of additional schooling or on-the-job training. Inventory investment refers to the accumulation of goods inventories it can be positive or negative, and it can be intended or unintended. In measure of national income and output, gross investment (represented by the variable I) is also a component of Gross domestic product (GDP), given in the formula GDP = C + I + G + NX, where C is consumption, G is government spending, and NX is net exports. Thus investment is everything that remains of total expenditure after consumption, government spending, and net exports are subtracted (i.e. I = GDP - C - G - NX). Non-residential fixed investment (such as new factories) and residential investment (new houses) combine with inventory investment to make up I. Net investment deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year. Fixed investment, as expenditure over a period of time ("per year"), is not capital. The time dimension of investment makes it a flow. By contrast, capital is a stock that is, accumulated net investment to a point in time Investment is often modeled as a function of Income and Interest rates, given by the relation I = f(Y, r). An increase in income encourages higher investment, whereas a higher interest rate may discourage investment as it becomes more costly to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than lending out that amount of money for interest. Investment related to business of a firm - business management
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The investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). Assets are used to produce streams of revenue that often are associated with particular costs or outflows. All together, the manager must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business. In terms of financial assets, these are often marketable securities such as a company stock (an equity investment) or bonds (a debt investment). At times, the goal of the investment is to produce future cash flows, while at others it may be for the purpose of gaining access to more assets by establishing control or influence over the operation of a second company (the investee). Business firms or organizations raise funds from investors in the form of equites, debts(collectively known as the capital structure)and further reinvest it into various investment schemes by carefully analysing the returns in order to meet out their obligations relating to purchase of assets which provides them long term benefits.

In finance
In finance, investment is the commitment of funds by buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold or collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Returns on investments will follow the risk-return spectrum. Types of financial investments include shares, other equity investment, and bonds (including bonds denominated in foreign currencies). These financial assets are then expected to provide income or positive future cash flows, and may increase or decrease in value yielding the investor capital gains or losses. Trades in contingent claims or derivative securities do not necessarily have future positive expected cash flows, and so are not considered assets, or strictly speaking, securities or investments. Nevertheless, since their cash flows are closely related to (or derived from) those of specific securities, they are often studied as or treated as investments. Investments are often made indirectly through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes, and investment clubs. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary.

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Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment. Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important, as investment risk can cause a capital loss when an investment is sold, unlike saving where the more limited risk is cash devaluing due to inflation. In many instances the terms saving and investment are used interchangeably, which confuses this distinction. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. Whether an asset is a saving(s) or an investment depends on where the money is invested: if it is cash then it is savings, if its value can fluctuate then it is investment.

Real estate as the instrument of investment

In real estate, investment money is used to purchase property for the purpose of holding, reselling or leasing for income and there is an element of capital risk. Residential real estate Investment in residential real estate is the most common form of real estate investment measured by number of participants because it includes property purchased as a primary residence. In many cases the buyer does not have the full purchase price for a property and must engage a lender such as a bank, finance company or private lender. Different countries have their individual normal lending levels, but usually they will fall into the range of 70-90% of the purchase price. Against other types of real estate, residential real estate is the least risky.

Commercial real estate

Commercial real estate consists of multifamily apartments, office buildings, retail space, hotels and motels, warehouses, and other commercial properties. Due to the higher risk of commercial real estate, loan-to-value ratios allowed by banks and other lenders are lower and often fall in the range of 50-70%

Investment, Investing, Types of Investment

Investment refers to the concept of deferred consumption, which involves

purchasing giving loan r keeping funds in a bank account with the aim of generating future returns on investment.

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Types of InvestmentsThe various types of investment are:

Cash investments: These include savings bank accounts, certificates of deposit (CDs) and treasury bills. These investments pay a low rate of interest and are risky options in periods of inflation.

This form of investment provides returns in the form of fixed periodic payments and possible capital appreciation at maturity. It is a safer and more 'risk-free' investment tool than equities. However, the returns are also generally lower than other securities.

Stocks: Buying stocks (also called equities) makes you a part-owner of the business and entitles you to a share of the generated by the company. Stocks are more volatile and riskier than bonds.

Mutual funds: This is a collection of stocks and bonds and involves paying a professional manager to select specific securities for you. The prime advantage of this investment is that you do not have to bother with tracking the investment. There may be stock- or index-based mutual funds.

Derivatives: These are financial contracts the values of which are derived from the value of the underlying assets, such as equities, commodities and on which they are based. Derivatives can be in the form of futures, options and swaps. Derivatives are used to minimize the risk of loss resulting from fluctuations in the value of the underlying (hedging).

Commodities: The items that are traded on the commodities market are agricultural and industrial commodities.

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Further ResourcesAdhere to trusted wealth management practices from top firms like Gain Free access to reports previously only available to Governments and select these reports are part of the Intelligence Newsletter that focuses on Conflicts many other topics. Their information is sourced through a wide network of contacts and is not available from traditional and data providers. What Does Premium Mean? 1.The total cost of an option. 2. The difference between the higher price paid for a fixed-income security and the security's face amount at issue. 3. The specified amount of payment required periodically by an insurer to provide coverage under a given insurance plan for a defined period of time. The premium is paid by the insured party to the insurer, and primarily compensates the insurer for bearing the risk of a payout should the insurance agreement's coverage be required.

Premium1. The premium of an option is basically the sum of the option's intrinsic and time value. It is important to note that volatility also affects the premium. 2. If a fixed-income security (bond) is purchased at a premium, existing interest rates are lower than the coupon rate. Investors pay a premium for an investment that will return an amount greater than existing interest rates. 3. A common example of an insurance premium comes from auto insurance. A vehicle owner can insure the value of his or her vehicle against loss resulting from accident, theft and other potential problems. The owner usually pays a fixed premium amount in exchange for the insurance company's guarantee to cover any economic losses incurred under the scope of the agreement. 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
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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. Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses

InsurabilityRisk which can be insured by private companies typically share seven common characteristics: 1. Large number of similar exposure units. Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates. 2. Definite loss. The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. 3. Accidental loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable. 4. Large loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the
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capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. 5. Affordable premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. 6. Calculable loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. 7. Limited risk of catastrophically large losses. Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the U.S., flood risk is insured by the federal government. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

LegalWhen a company insures an individual entity, there are basic legal requirements. Several commonly cited legal principles of insurance include 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 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.
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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. Co-proximal, 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. Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.

InsurabilityRisk which can be insured by private companies typically share seven common characteristics 8. Large number of similar exposure units. Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates. 9. Definite loss. The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. 10. Accidental loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks or even purchasing a lottery ticket, are generally not considered insurable. 11. Large loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of

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losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. 12. Affordable premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that the insurance will be purchased, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. 13. Calculable loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. 14. Limited risk of catastrophically large losses. Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the U.S., flood risk is insured by the federal government. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Indemnification
To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek to indemnify an insured: 1. an "indemnity" policy, and 2. a "pay on behalf" or "on behalf of"] policy. The difference is significant on paper, but rarely material in practice. An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner
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would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000). Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner in the above example) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance policy. Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the premium. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims in theory for a relatively few claimants and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves), the remaining margin is an insurer's profit.

EffectsInsurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud, on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through moral hazard, insurance fraud, and preventive steps by the insurance company. Insurance scholars have typically used moral hazard to refer to the increased loss due to unintentional carelessness and moral hazard to refer to increased risk due to intentional carelessness or indifference.] Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures - particularly to prevent disaster losses such as hurricanes - because of concerns over rate reductions and legal battles. However, since about 1996 insurers began to take a more active role in loss mitigation, such as through building codes.
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Insurers' business model The business model is to collect more in premium and investment income than is paid out in losses, and to also offer a competitive price which consumers will accept. Profit can be reduced to a simple equation: Profit = investment income - incurred loss underwriting expenses.

Insurers make money in two ways: 1. Through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to carge for accepting those risks; 2. By the premiums they collect from insured parties. The most complicated aspect of the insurance business is the actuarial science of ratemaking (price-setting) of policies, which uses statistics and probability to approximate the rate of future claims based on a given risk. After producing rates, the insurer will use discretion to reject or accept risks through the underwriting process. At the most basic level, initial ratemaking involves looking at the frequency and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss data, bring the loss data to present value, and comparing these prior losses to the premium collected in order to assess rate adequacy. and expense loads are also used. Rating for different risk characteristics involves at the most basic level comparing the losses with "loss relativities" - a policy with twice as money policies would therefore be charged twice as much. However, more complex multivariate analyses through generalized linear modeling are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses. Upon termination of a given policy, the amount of premium collected and the investment gains thereon, minus the amount paid out in claims, is the insurer's underwriting profit on that policy. An insurer's underwriting performance is measured in its combined ratio which is the ratio of losses and expenses to earned premiums. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss. A company with a combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn investment profits on "float". Float, or available reserve, is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out.

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The Association of British Insurers (gathering 400 insurance companies and 94% of UK insurance services) has almost 20% of the investments in the London Stock Exchange. In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the float method is difficult to carry out in an economically-depressed period. Cause insurers to shift away from investments and to toughen up their underwriting standards, so a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the underwriting, or insurance, cycle

ClaimsClaims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by ACORD. Insurance company claims departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment. The policyholder may hire their own public adjuster to negotiate the settlement with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim. Adjusting liability insurance claims is particularly difficult because there is a third party involved, the plaintiff, who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge.
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If a claims adjuster suspects underinsurance, the condition of average may come into play to limit the insurance company's exposure. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation

COMPANY PROFILE

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 700 locations through its bank partners and company-owned offices. MetLife has more than 55,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife has more than 50,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States (based on life insurance inforce), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500 companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions. Here are few highlights in our 140 years of history: 1868 Metropolitan Life Insurance Company is established
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1912 In partnership with American Red Cross, transforms the corporate headquarters into an administrative relief and support center for Titanic survivors and their families. 1930 Helps thousands of farmers buy back their foreclosed farms and restores them to productivity during Great Depression 1931 Provides financing for the construction of the Empire State Building and Rockefeller Center 1974 Auto and home insurance are added to our product offerings 1989 First operations outside of the U.S. are established in Korea and Taiwan. 1991 - Becomes the first insurer in North America to surpass $1 trillion of life insurance in force 1992 Establishes the first Latin American operation 2000 Becomes a publicly owned stock company with MetLife, Inc. listed on the New York Stock Exchange 2001 Enters the banking sector with establishment of MetLife Bank. Responds to 9/11 by paying claims immediately, awarding grants and investing over $1 billion in publicly traded stocks. 2002 Acquires Aseguradora Hidalgo, S.A., becoming the largest life insurer in Mexico. 2005 Acquires Travelers Life & Annuity and substantially all of Citigroups international insurance business, strengthening our leadership in the U.S. and expanding its distribution capabilities worldwide.

PARTNERS OF METLIFE:

Geojit Securities was founded by Mr.C.J George in 1987 as a Proprietorship for doing Broking business in Cochin Stock Exchange. In 1994, the business was taken over by Geojit Securities Ltd, a Joint Venture between Mr.C.J George and the Kerala State Industrial Development Corporation Ltd. In the following year, the company came up with an IPO and the shares were listed in various Stock Exchanges in India in 1995

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Jammu and Kashmir Bank Limited was incorporated on 1st October, 1938 and commenced its business from 4th July, 1939 at in Kashmir (India). The Bank was the first in the country as a State owned bank. According to the extended Central laws of the state, Jammu & Kashmir Bank was defined as a govt. Company as per the provision of Indian companies' act 1956. In the year 1971, the Bank received the status of scheduled bank. It was declared as "A" Class Bank by RBI in 1976. Today the bank has more than 500 branches across the country and has recently become a billion Dollar Company.

Mangaloreheadquartered Karnataka Bank, a leading private sector Bank having a network of 433 branches across 19 States and 2 Union Territories, is more than 84 years old. The Bank is a technology savvy, customer centric progressive bank with a national presence, driven by the highest standards of corporate governance and guided by sound ethical values. All the 433 branches of the Bank are under the umbrella of core banking solution. The Bank has a host of customer friendly deposit and advances products meeting the varied needs and preferences of its customers. The Bank offers a plethora of technology driven products like Internet Banking facility, Demat services, Mutual Fund products of reputed companies, Life and General Insurance services, Visa enabled Debit Card with wide acceptability across the globe. The Bank has an ambitious business turnover target of Rs. 35000 crores for the year 2008-09 with a branch expansion plan to reach the tally of 460 branches and additional ATMs to take the total to 180 by end-March 2009.

In 1982, a group of Hyderabad-based practicing Chartered Accountants started Karvy Consultants Limited with a capital of Rs.1,50,000 offering auditing and taxation services initially. Later, it forayed into the Registrar and Share Transfer activities and subsequently into financial services. All along, Karvy's strong work ethic and professional background leveraged with Information Technology enabled it to deliver quality to the individual

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Established in 1921, Mini Muthoottu with an illustrious history of banking behind them today operates from 75 branches in Kerala and 5 in Bangalore. All business concerns of Mini Muthoottu function under the strict guidelines set by the Department of Company Law Affairs and Reserve Bank of India. They also have a certificate of compliance with the requirements regarding prudential norms from the Reserve Bank of India. Mini Muthoottu, under the able leadership of its Chairman, Mr. Roy M Mathew, offers both the resources and capabilities like any national player coupled with individualized attention to its customers.

OBJECTIVES
The main of the present study of is accomplish the following objective. Proper understanding and analysis of life insurance industry To know about brand awareness of MetLife India Insurance and customers Derived opinion on that research. Conduct market survey on a sample selected from the entire population and According the market survey come know about how much potential of Insurance market in our city.

And base on analysis of the result thus obtained make a report on that research. Training aims at recruiting maximum number of Life Advisors and to Sell the maximum policies for the company and bring the business for the company ever is going at the particular point of time. Along with it I will be gaining the thorough knowledge of insurance sector. This will give me in more confidence in marketing products given to me. As the Kotak Life Insurance well reputed company in India its great chance for me to observed different products launch by other competitor companies like ICICI prudential, Bajaj alliance ,LIC, Max New York life etc. In all, it is to understand the overall working of the Life insurance sector. The objective behind the project is as follows: To find the right candidate. To about their family background, occupation, social relation, Qualification, Age. Finalize candidates for the IRDA train
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Mission
At MetLife India Insurance, we aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.

Vision & values

MetLife India Insurance has a deep rooted commitment to improve the quality of life of its customers, employees and stakeholders. We aim at improving the long term value in our mutual trust and benefits to serve the Indian customer. At MetLife India insurance the customers always come first.

Corporate Social Responsibility:

MetLife has always been committed to making a positive difference in the lives of the individuals and communities. Today, that commitment drives volunteer work and philanthropy across the globe. Working with non-profit organizations, MetLife supports programs that provide young people with the skills they need to succeed in life and create opportunities for people of all ages. MetLifes core values are personal responsibility, people count, partnership, integrity and honesty, innovation and financial strength. These values also shape the responsibility to the communities where the organization conducts its business.

PNB to enter strategic partnership with MetLife India29-Jul-11,

Punjab National Bank (PNB) and MetLife India, an affiliate of MetLife Inc., announced today that PNB will be inducted as a joint venture partner in the company. The Board of PNB, in its meeting held on 28th July, accepted the offer made by MetLife India for acquiring 30% stake in the company. The transaction is subject to approvals from IRDA, RBI and other regulatory bodies. PNB started the process in December last year when it invited expression of interest from insurance companies across the world. The Bank received responses from 26 Indian and international companies proposing different models. After evaluation of the various models, the Bank opted to participate in a brownfield venture by acquiring stake in an existing Indian life insurance company. Accordingly, RFP was issued to 10 Indian insurance companies who had proposed this model. Based on the technical evaluations, the Bank had shortlisted 3 life insurance companies. After evaluation of the financial bids of the three shortlisted companies, the Bank accepted the offer of MetLife India. MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private
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Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife has more than 30,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. PNB is the largest nationalized bank having a branch network of 5,290 branches and a customer base of over 60 million. The partnership with MetLife will provide PNB, insurance expertise and bancassurance capabilities that will be an asset to the bank as it pursues its growth strategy in India and seeks to expand its leadership in the Indian financial services market. This will further strengthen the companys position as a leader in the rapidly expanding bank distribution channel. Following the closing of the transaction, the company will rebrand itself as PNB MetLife to leverage the strengths of the two brands in the Indian market. On this occasion, Mr. K. R. Kamath, Chairman and Managing Director of the Bank informed that "We are happy that the process which has set a benchmark in the industry has helped us to find the best insurance partner for the Bank in MetLife. With 60% branches in the rural and semi urban areas, PNB is uniquely positioned to take insurance to the deep pockets of India. This partnership has the potential to drive the company into the top tier of Indian life insurers and more than double its market share." Mr. Kamath also acknowledged the role of Boston Consulting Group for running the process which has been well acknowledged by the industry. William J. Toppeta, President International of MetLife expressed his pleasure at the tie up "Given its global significance, India is a strategic focus market for MetLife. We believe that the addition of an outstanding financial institution like PNB as a shareholder and partner will greatly enhance MetLife India''s ability to move into the top tier of life companies here. We value PNB and our current shareholders for their integrity, market knowledge, distribution power and financial strength. We look forward to a long and productive partnership for the mutual benefit of Indian consumers and our respective shareholders".

India) registers Rs 35.35 crore net profit for FY11

MetLife India Insurance Company Limited (MetLife) today announced that the company has posted a net profit of Rs 35.35 crore for the financial year ended March 31, 2011, for the first time since it has launched operations in the country. MetLife India posted a loss of Rs 274.82 crore at the net level in the previous financial year ended March 31, 2010. Improved operational efficiency coupled with planned sales helped the company register a profit. Further, persistency and robust risk management lead to reduced claims and dynamic product mix with a strong focus on traditional products.I am glad that we have achieved a break-even an year ahead of our plan. This is a testimony to
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the promise we made to our shareholders 5 years back to make the company profitable, while delivering growth. We have been able to balance our growth with profitability despite the uncertainty in the sector and this can be attributed to our healthy product mix and operational efficiency initiatives, said Mr. Rajesh RelanManaging Director & CEO, MetLife (India) while commenting on the performance. The company registered flat total revenue at Rs 2,615.13 crore for the financial year ended March 31, 2011 compared to Rs 2,627.63 crore in the previous financial year. Renewal income has witnessed a 22% jump and grew to Rs 1801.95 crore from 1474.16 crore in the corresponding financial year. However, new business premium declined by 33.49 per cent owing to the market conditions. Operating expenses declined 17.32 per cent to Rs 563.84 crore compared to Rs 681.99 crore for the year ended March 31, 2010. Further, operating expenses as a percentage of gross premium has declined to 22% from 27% in the previous financial year. MetLife Indias solvency ratio improved to 1.69 from 1.65. As on March 31, 2011, asset under management stood at Rs 7,851.46 crore compared to Rs 5,950.63 Mr Relan also added, We are in discussion with leading banks and other financial institutions to expand our distribution, while we continue to improve the productivity and efficiency of our agency business. In our employee benefits business, we have been rated as the no.1 competitor by the industry players. We will continue to maintain the growth momentum and endeavour to grow faster than the market to increase the size of our profits. MetLife India has a well balanced portfolio of unit linked, traditional and group products, though the company has emerged as one of the highest mix of traditional products, which now comprise close to 50% of its product portfolio, compared with rest of private players (Life) at less than 10%. This provides us access to various customer segments having diverse needs and risk profiles and continues to give an edge for both growth and profitability. MetLifes strategy of focusing on traditional plans has helped it deliver better margins, and a balanced product mix will continue to help in that effort. Post the new regulation that has come into effect from September 1, 2010, the real trends are emerging gradually. Sales in the entire industry have been lower in September and October and growth seems to be flat over the previous year. As the company continue to achieve its planned sales along with the initiatives mentioned above, it will continue to restrain profits. MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 700 locations through its bank partners and companyowned offices. MetLife has more than 55,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the
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number one life insurer in the United States (based on life insurance in force), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500 companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions.

MANAGEMENT:
We at MetLife India Insurance Company Limited work as a team and have a flat management structure. Our top management has many years of experience which has helped guide the company into a position of leadership. Every member of the Metlife team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

LIMITATIONS
Insurance does not give good returns Still today people think that Insurance does not give good returns. They are not aware of the modern Unit Linked Insurance Plans which are offered by most of the Private sector players. They are still under the perception that if they take Insurance they will get only 5-6% returns which is not true nowadays. Nowadays most of the modern Unit Linked Insurance Plans gives returns which are many times more than that of bank Fixed deposits, National saving certificate, Post office deposits and Public provident fund. Lack of awareness about the earning opportunity in the Insurance sector People still today are not aware about the earning opportunity that the Insurance sector gives. After the privatization of the insurance sector many private giants have entered the insurance sector. These private companies in order to beat the competition and to

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increase their Insurance Advisors to increase their reach to the customers are giving very high commission rates but people are not aware of that. Increased competition Today the competition in the Insurance sector has became very stiff. Currently there are 18 Life Insurance companies working in India including the LIC (life insurance Corporation of India). Today each and every company is trying to increase their Insurance Advisors so that they can increase their reach in the market. This situation has created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has became very difficult.

SALES DISTRIBUTION
Tied Agency is the largest distribution channel of Metlife, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable. Metlife was a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the companys sales and distribution strategy, contributing to approximately one third of companys total business. The business philosophy at B&A is to leverage distribution synergies with our partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel.

COMPANY STRATEGY:
Now company applies the project turning point and in this project to decide the selection criteria for life advisor and life advisor is the basic requiremen t for sale the policy. The selection criteria for advisor are:

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 Agent age > 30 for male LA, and >25 for female. Agent income 5 lakhs Agent stay in city belong > 5 years Family back ground strong. Minimum graduate Either 2 years experience or post graduate refresher.

PRODUCTS:
Child Plan Met Bhavishya Met Junior Endowment Met Junior Moneyback

Retirement

Met Pension-Par

Saving Met Sukh Met Suvidha Met Saral Met 100

Protection Met Suraksha Met Suraksha TROP

Rural Met Vishwas Met Suvidha Rural Met Grameen Ashray

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Investment Met Smart Platinum Met Smart One Met Easy Super Health

Met Health Care Met Health Cash

Monthly Income Met Monthly Income Plan Met Monthly Income Plan 15 Pay Met Monthly Income Plan 7 Pay

MAJOR PLAYER OF INSURANCE IN INDIA

The Life Insurance Corporation of India (LIC) is the largest life insurance company in India EFFECTIVE MARKETING STRATEGIES FOR INSURANCE PRODUCTS Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now days an insurance manager requires leadership, commitment, creativity, and flexibility. "Every family in every village in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager.

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Financial, marketing and human resource polices of the corporations influence the unit mangers to make decisions. Performance of insurance company depends on the effectiveness of such policies. Insurance corporations formulate and revise these policies from time to time to ensure that the performance of the managers is best for the organization. In the competitive market, insurance companies are being forced to adopt a strictly professional approach in marketing. The insurance companies face the challenge of changing the uninspiring public image of the industry. Some of the important marketing elements are Marketing mix. The importance of relationship. Positioning. Value addition. Segmentation. Branding. Insuring service quality. Effective pricing. Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it. The following factors influence the market and demand of product Government policies. Growth in population.

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 Changing age profile. Income wise distribution of the population. Level of insurance awareness. The pricing of the policies. The economic climate of the country. The aversion to risk. Social and political features of the country. Growth scenario in the world. Different companies adopt different approaches in their marketing strategies. One approach is focus upon product quality which can give confidence in the mind of customers that they are offered by best featured products. And other approach is focusing on customers needs, which involve a heavy investment in developing relationships with policyholders. Under this approach customer can expect a range of products and service offered to him. Third approach is market segmentation under which the population can be divided into several homogeneous products and groups, the effort should be tie clients to the company by customized combination of coverage, easy payment plans, risk management advice, and convenient and quick claim handling. An insurance product can be classified into three phases: Core product: In insurance industry the core product is the policy that provides protection to the customers. Expected product: Because of competition customers start to expect more from an insurance product. Then insurance companies provide some tangible attributes in their product to differentiate from competitors, such as-

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Brand Some additional features in existing product By providing instruction manual with the policy

Augmented product: An insurance company can provide different types of services to differentiate their products Post sales services. Branches in different places for customers. Customer complaint management. Payment option convenient to customers.

The entry of private players and their foreign partners has given domestic players a tough time, because the opening up of the sector has not brought in only foreign players, but also professional techniques and technologies. The present scene in India is such that everyone is trying to put in the best efforts. There are marketing strategies more for survival than growth. But the most important gift of privatization is the introduction of customer-oriented services. Utmost care is being taken to maximize customer satisfaction.

Success of an insurance company depends on four important functions:

Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis. Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents.
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 Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving overall efficiency in operations. The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations. Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, companys market share, increase in number of branches and divisions etc. Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness. Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provide measures of efficiency of a unit as well as the organization.

To find best prospects: Allocating marketing strategies against market potential. Estimating potential for specific products within local markets. Identifying high opportunity areas. Measuring agency performance relative to market potential. Optimizing your agency network against market potential.

Attributes to develop marketing strategies: Channel data: - Useful to know future buying preferences, learning about products and purchase channels.
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 Consumer attitudes. Consumption data: - Useful to evaluate annual premiums, number of annuities owned, value of annuities, and with which company the current policy is held. Effective Strategies for Insurance Agents: Learn how to construct a mental image for success. Learn how to find a proper perspective and how to turn off all the signals that cause people not to buy from you. Learn how to get and set more appointments. Learn how to convert a new lead into sales. Learn how to act when you meet a client for the first time. Learn how the order in which you explain the types of policies can double your inc

MAJOR PLAYER OF INSURANCE IN INDIA The Life Insurance Corporation of India (LIC) is the largest life insurance company in India a

EFFECTIVE MARKETING STRATEGIES FOR INSURANCE PRODUCTS

Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now a day an insurance manager requires leadership, commitment, creativity and flexibility. "Every family in every village

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in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager. Financial, marketing and human resource polices of the corporations influence the unit mangers to make decisions. Performance of insurance company depends on the effectiveness of such policies. Insurance corporations formulate and revise these policies from time to time to ensure that the performance of the managers is best for the organization. In the competitive market, insurance companies are being forced to adopt a strictly professional approach in marketing. The insurance companies face the challenge of changing the uninspiring public image of the industry. Some of the important marketing elements are Marketing mix. The importance of relationship. Positioning. Value addition. Segmentation. Branding. Insuring service quality. Effective pricing. Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it. The following factors influence the market and demand of product Government policies. Growth in population. Changing age profile.
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Income wise distribution of the population. Level of insurance awareness. The pricing of the policies. The economic climate of the country. The aversion to risk. Social and political features of the country. Growth scenario in the world.

Different companies adopt different approaches in their marketing strategies. One approach is focus upon product quality which can give confidence in the mind of customers that they are offered by best featured products. And other approach is focusing on customers needs, which involve a heavy investment in developing relationships with policyholders. Under this approach customer can expect a range of products and service offered to him. Third approach is market segmentation under which the population can be divided into several homogeneous products and groups, the effort should be tie clients to the company by customized combination of coverage, easy payment plans, risk management advice, and convenient and quick claim handling. An insurance product can be classified into three phases:

Core product: In insurance industry the core product is the policy that provides protection to the customers. Expected product: Because of competition customers start to expect more from an insurance product. Then insurance companies provide some tangible attributes in their product to differentiate from competitors, such as Brand Some additional features in existing product By providing instruction manual with the policy
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Augmented product: An insurance company can provide different types of services to differentiate their products Post sales services. Branches in different places for customers. Customer complaint management. Payment option convenient to customers.

The entry of private players and their foreign partners has given domestic players a tough time, because the opening up of the sector has not brought in only foreign players, but also professional techniques and technologies. The present scene in India is such that everyone is trying to put in the best efforts. There are marketing strategies more for survival than growth. But the most important gift of privatization is the introduction of customer-oriented services. Utmost care is being taken to maximize customer satisfaction.

Success of an insurance company depends on four important functions:

Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis. Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents. Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving
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overall efficiency in operations. The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations. Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, companys market share, increase in number of branches and divisions etc. Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness. Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provides measures of efficiency of a unit as well as the organization. Investment control and expense control are dealt separately and the effectiveness of managements decisions at various levels is to be assessed separately. To find best prospects: Allocating marketing strategies against market potential. Estimating potential for specific products within local markets. Identifying high opportunity areas. Measuring agency performance relative to market potential. Optimizing your agency network against market potential.

Attributes to develop marketing strategies: Channel data: - Useful to know future buying preferences, learning about products and purchase channels. Consumer attitudes.

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 Consumption data: - Useful to evaluate annual premiums, number of annuities owned, value of annuities, and with which company the current policy is held. Effective Strategies for Insurance Agents: Learn how to construct a mental image for success. Learn how to find a proper perspective and how to turn off all the signals that cause people not to buy from you. Learn how to get and set more appointments. Learn how to convert a new lead into sales. Learn how to act when you meet a client for the first time.

Learn how the order in which you explain the types of policies can double

If we talk the growth of Insurance industrys private players in recent years, the data will reflect:-

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Structure of MetLife India Insurance Managing Director & Country Manage: Rajesh Relan Appointed Actuary: MSVS Phanesh Director- Agency: Sameer Bansal Chief Financial Officer: Joydeep Mukherji Director - Marketing, Products & Business Development: Balachander Sekhar Director - Legal & Risk and Company Secretary: KR Anil Kumar Director Compliance & Internal Control: P. S. Sankaran Chief Operating Officer: KS Raghavan Director - PNB Partnerships: Gaurav Sharma

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ITS HIERARCHY IN METLIFE INDIA INSURANC:

MANAGING DIRECTOR CEO SALES HEAD MARKETING HEAD HR & ADMIN. APPOINTED ACTUARY TRAINING HEAD

CIO

HIERARCHY OF METLIFE INSURANCE LIMITED (LUCKNOW BRANCH)

REGIONAL MANAGER

AREA MANAGER

BRANCH OPERATIONS INCHARGE

SALES MANAGER

+OPERATION EXECUTIVE

ASST. SALES MANAGER

OPERATIONS

FINANCIAL ADVISOR

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RESEARCH METHODOLOGY:
INTRODUCTION:

Research is an art of scientific investigation through search for new facts in Any branch of knowledge. It is a moment from known to unknown. Research always starts with a question or a problem. Its purpose is to find answers to questions through the Application of the scientific method. It is a systematic and intensive study directed towards a more Complete knowledge of the subject studied. As marketing does not address itself to basic or fundamental question, it Does not qualify as basic research. On the contrary, it tackles problems, Which seem to have immediate commercial potential. In view of the major Consideration, marketing research should be regarded as applied research. We may also say that marketing research is of both types Problem solving And problem oriented. Marketing research is as systematic and objectives study of the problems Pertaining to the marketing of the goods and services. It may be emphasized That it is not restricted to any particular area of marketing, but is applied to All the phases and aspects.

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RESEARCH LIMITATIONS
The research is confined to certain parts of Delhi and does not necessarily show a pattern applicable to all of country. Some respondents were reluctant to divulge personal information which can affect the validity of all responses. In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

Data Collection Method For given project, the primary data, this needed to collect for the first Time, were much significant. This type of information gathered through Survey technique, which is the most popular and effective technique for Correct data collection. The survey was completed with the use of Questionnaires. Questionnaire for consumer: QUESTIONNAIRE

Q 1) Do you know about METLIFE INSURANCE POLICY? AnsYes No

Q2) Do you have any life insurance policy?

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Ans-

Yes

No

Q3) which companys life insurance policy do you have? Ans- a) b) c) d) LIC METLIFE INDIA INSURANCE ICICI LIFE PRUDENTIAL OTHERS

Q4) Why you have chosen LIC not others? Ans- a) b) c) d) Govt. undertaken Oldest insurance company Minimum premium Other facilities

Q5) Do you know anything about METLIFE INDIA INSURANCE? Ans- YES NO

Q6) which policy do you have in METLIFE INDIA INSURANCE? Ans- a) PROTECTION PLAN

b) c) d)

ULIP PLAN MONEY BACK PLAN OTHERS

Q7) why you have chosen ULIP plan? Ans- a) b) SHORT TERM PLAN TAX SAVING
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c)

MAXIMUMRETURN

Q8) In future which plan will you prefer except ULIP? Ans-a) Met Sukh

b) c)

MONEY BACK PLAN Met Suvidha

Q9) Would you like to prefer METLIFE INDIA INSURANCE in future? AnsYES NO

Sampling Sample is the small group taken under consideration from the total group. This small group represents the total group. In the project the market Research, which was ask to be studied was Lucknow Market but as it was possible To approach all the respondent s customer of the city, hence a sample was Selected which represents the whole city. The areas selected for the sample are present further in the appendix. Sample size of customer 300350 approx. was taken from MetLife India Insurance customer data basic

Data analysis of consumer behavior:

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Data Analysis and Interpretation:- In it through the help of questionnaires we conducted

the research and these are as below:-

Statement 1:- Do you know about MetLife India Insurance Company?

YES___65%

NO___35%

Chart Title
70% 60% 50% 40% 30% 20% 10% 0% YES NO

INTERPRETATION- We did survey on 300 people approx. in which we found that

65% (195 respondents) know about METLIFE INDIA INSURANCE COMPANY LIMITED and 35% ( 105 respondents) didnt know about ITC COMPANY LIMITED.

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Statement 2:- Do you have any life insurance policy?

YES- 85%

NO- 15%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% YES NO

INTERPRETATION- We found that 85% (165 respondents) of people have a life insurance policy and 15% (29 respondents) of people dont have any life insurance policy.

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Statement 3:- Which companys life insurance policy do you have?

70% 60% 50% 40% 30% 20% 10% 0% LIC METLIFE ICICI PRUDENTIAL OTHERS

INTERPRETATION- We found that only 10% people of the LI holder hold MetLife India Insurance plans.

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Statement 4:- why you chosen LIC not others?

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 government undertaken oldest insurance company minimum premium other facilities

INTERPRETATION- We found that most of the people prefer the govt. undertaken Company.

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Statement 5:- Did you know any think about METLIFE INDIA INSURANCE?

70% 60% 50% 40% 30% 20% 10% 0% YES NO

INTERPRETATION- We found that 40% people know about METLIFE INDIA

INSURANCE.

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Statement 6:- Which policy do you have in METLIFE INDIA INSURANCE?

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Met Suvidha ulip plans money back plan others

INTERPRETATION- In this analysis we found that mostly people preferred MET SUVIDHA plans (45% respondents).

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Statement 7:- Why have you chosen MET SUVIDHA plan?

70% 60% 50% 40% 30% 20% 10% 0% short term plan tax saving maximum return

INTERPRETATION- In this analysis we found that ULIP plan is short term plan thats why most of the people preferred this plan.

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Statement 8:- In future which plan will you prefer except MET SUVIDHA PLAN?

0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 Met Sukh money back plan ULIP

INTERPRETATION- We found that most of the people (50%) preferred ULIP

PLAN.

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Statement9:- Would you like to prefer METLIFE INDIA INSURANCE in future?

60% 50% 40% 30% 20% 10% 0% yes no

INTERPRETATION- In this project survey we found that 45% people were prefers METLIFE INDIA INSURANCE.

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RECOMMENDATIONS:
Networking is needed to be made broad as the number of branches with MetLife India Insurance is only 75 and only14 states are touched by the company so; there is a huge untapped market available for MetLife. Marketing in terms of the media via advertisements on Television to small commercials on FM, hoardings and signage etc. has to be made because there were respondents who havent even heard about MetLife India Insurance. Awareness camp for sub-urban area should be focused. State and Central Government employees should be targeted because of reasons like: They dont have Life Insurance cover other than that provided by their respective employers and LIC. Most of them are underinsured. They have a stable source of income and social security. MetLife India Insurance recruits its advisors mainly through personal reference, through advertisement and through walk-in interviews. They must also recruit them though placement agencies on trial basis. MetLife India Insurance must build its reputation by focusing on service quality. Better service quality. Better service quality may be in the form: Issuing policy in time. Providing claims in time. Making customers aware about their status of policy.

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CONCLUSIONS:

During the data collected, it has been found that people have great awareness about various companies but a lot more has to be done, especially by smaller companies like MetLife India Insurance to establish their market presence.

People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been influenced by the marketing activities of insurance companies. A high penetration of print, radio and TV ad campaigns over the years is beginning to have its impact now.

Another important trend was in terms of people viewing insurance as a tax saving and investment instrument as much as protective one. The general satisfaction levels among public with regards to policy and agents still requires improvement. Here lies the opportunity for a relatively new comer like MetLife India Insurance. LIC has never been known for prompt service or customer oriented methods but MetLife India Insurance can build its reputation based on these factors.

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BIBLIOGRAPHY

REFERENCES: www.IRDA.com www.licindia.com www.metlife.co.in www.hdfcinsurance.com www.businessindiaonline.com www.maxnewyorklife.com www.brandonline.com www.iciciprulife.com

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ANNEXURE

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