CONTENTS

Pages

ACKNOWLEDGEMENT PREFACE EXECUTIVE SUMMARY INTRODUCTION TO THE INDUSTRY INTRODUCTION TO THE COMPANY RESEARCH METHODOLOGY Title Objective of the Study Scope of the Study Significance of the Industry Significance of the Research Research Technique Sampling Methodology Sampling unit Sampling Area Sample Size Limitations MARKETING STRATREGIES OF THE COMPANY FACTS AND FINDINGS DATA AND INTERPRETATION CONCLUSION & RECOMMENDATIONS BIBLIOGRAPHY ANNEXURE Questionnaire 1

03 04 06 07 20 26

30 32 34 54 56

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PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated debate for some years. The policy makers where in the catch 22 situation wherein for one they wanted competition, development and growth of this insurance sector which is extremely essential for channeling the investments in to the infrastructure sector. At the other end the policy makers had the fears that the insurance premia, which are substantial, would seep out of the country; and wanted to have a cautious approach of opening for foreign participation in the sector. As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw the day of the light thanks to the maturing polity emerging consensus among factions of different political parties. Though some changes and some restrictive clauses as regards to the foreign participation were included the IRDA has opened the doors for the private entry into insurance. Whether the insurer is old or new, private or public, expanding the market will present multitude of challenges and opportunities. But the key issues, possible trends, opportunities and challenges that insurance sector will have still remains under the realms of the possibilities and speculation. What is the likely impact of opening up Indias insurance sector? 2

The large scale of operations, public sector bureaucracies and cumbersome procedures hampers nationalized insurers. Therefore, potential private entrants expect to score in the areas of customer service, speed and flexibility. They point out that their entry will mean better products and choice for the consumer. The critics counter that the benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks did until recently. This seems to be a logical strategy. Startup costs-such as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, the middle-market segment too has great potential. Since insurance is a volumes game. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped.

EXECUTIVE SUMMARY

In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and RELIANCE LIFE INSURANCE has given me the opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents or agency holders of the company. If a company like RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer .

INTRODUCTION TO THE INDUSTRY

THE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. Unethical practices adopted by some of the

players against the interests of the consumers then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and reach. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: The market contained 154 Indian and 16 foreign life insurance companies. General Insurance The General Insurance industry in India dates back to the Industrial Revolution and the subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the British brought General Insurance

to India, and a similar path was followed in the development of this industry. A number of private companies were in existence for years and years until, in 1971, the Indian Government decided that the public interest would be served by nationalizing the industry, merging all the 107 companies into four companies, depending on the sort of business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras respectively. The General Insurance Corporation (GIC) was set up in 1972 as a holding company, having these four companies as its subsidiaries.

Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against

the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum

General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with effect from Dec'2000, these subsidiaries have been delinked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of

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general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies. IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-05). 1. HDFC Standard Life Insurance Company Ltd. 11

HDFC Standard Life Insurance Company Ltd. is one of Indias leadi ng private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have been covered through our group business tie-ups. 2. RELIANCE LIFE INSURNACE Life Insurance Co. Ltd. RELIANCE LIFE INSURNACE Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India.

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3. ICICI Prudential Life Insurance Company Ltd. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. 4. Om Kotak Mahindra Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. 5.Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. 13

 AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd. 1. Royal Sundaram Alliance Insurance Company Limited The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi. 2. Bajaj Allianz General Insurance Company Limited Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany. 3. ICICI Lombard General Insurance Company Limited ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax

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Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001. 4. Cholamandalam General Insurance Company Ltd. Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi,

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

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with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake. Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines. 6. Reliance General Insurance Company Limited. 7. IFFCO Tokio General Insurance Co. Ltd 8. Export Credit Guarantee Corporation Ltd. 9. HDFC-Chubb General Insurance Co. Ltd.

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COMPANY PROFILE
RELIANCE LIFE INSURANCE

FOUNDER Few men in history have made as dramatic a contribution to their countrys economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of Indias capital markets, the champion of shareholder interest.

But the role Dhirubhai cherished most was perhaps that of Indias greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, Indias largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crore colossusan achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so.

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Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of firsttime retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian markets.

Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become Indias largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the worlds largest shareholder families.

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ABOUT RELIANCE Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporates.

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CORPORATE OBJECTIVE

At Reliance Life Insurance, we strongly believe that as life is different at every stage, life insurance must offer flexibility and choice to go with that stage. We are fully prepared and committed to guide you on insurance products and services through our well-trained advisors, backed by competent marketing and customer services, in the best possible way.

It is our aim to become one of the top private life insurance companies in India and to become a cornerstone of RLI integrated financial services business in India. CORPORATE MISSION

To set the standard in helping our customers manage their financial future.

BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY RELIANCE LIFE INSURANCE INSURANCE PLANS AVAILABLE 1. Products (Individual Plans) Savings (Endowment)

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2. Reliance Endowment Plan (formerly Divya Shree) 3. Reliance Special Endowment Plan (formerly Subha Shree) 4. Reliance Cash Flow Plan (formerly Dhana Shree) 5. Reliance Child Plan (formerly Yuva Shree) 6. Reliance Whole Life Plan (formerly Nithya Shree) Pensions 7. Reliance Golden Years Plan (formerly Bhagya Shree) Investments 8. Reliance Market Return Plan (formerly Kanaka Shree) 9. Risk / Protection 10.Reliance Term Plan (formerly Raksha Shree) Products (Group / Corporate Plans) 11.Risk (Protection)

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Reliance Group Term Assurance Policy (formerly Group Term Assurance Policy) Reliance EDLI Scheme (formerly EDLI Scheme) 12.Pensions a. Reliance Group Gratuity Policy (formerly Group Gratuity Policy) b. Reliance Group Superannuation Policy (formerly Group Superannuation Policy) 13.Reliance Money Guarantee Plan

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PRODUCTS

Solutions for Individuals Taking time out from your daily schedule to plan your future is a necessary task. You could do with some help, but who can help you? Reliance Life Insurance is here with Solutions for Individuals, a series of plans that will help you make wise investments, protect your family, secure your childs future and even chalk out a plan for your retirement. So what are you waiting for? Invest in one of Reliance Solutions for Individuals and pave the way for a worry-free life!

Plans
Protection Plans Protect your family even when youre not around by investing in Reliance Protection Plans. Choose a limited period plan or a lifetime protection plan depending on your needs.. Read More Savings & Investment Plans Reliance Savings & Investment Plans help you to set aside some money to achieve specific goals in life, which means that you can enjoy life and provide for your familys daily needs... Read More Retirement Plans Invest today in Reliance Retirement Plans and save money to enjoy life even after retirement. You will never have to depend on another person or make any compromises to maintain your current lifestyle... Read More Child Plans Save systematically and secure your childs future needs by investing in Reliance Child Plans. You can always be there for your child when he or she needs you... Read More

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24

COMPARISION

NEW UNIT GAIN PLUS Vs LIC BIMA PLUS

FEATURES

NEW UNIT GAIN PLUS

LIC BIMA PLUS

0-60 years Age

12-56 years

Term

Choice rests with a minimum 10 years period of payment of 3 years.

Sum Assured

Minimum sum assured is 5 Maximum limit up to times the premium paid. Rs. 2 lakhs.

Maximum sum assured is as per the limits set per age bands.

Survival Benefit

Value of Fund at Bid Price

Bid value of the fund units along with maturity bonus at

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5% of the Sum Assured.

Higher the Sum Assured or Death during the 1st 6 monthsvalue of units. However, the 30% of SA + value of units,
Death Benefit

value of units will treat as next 6 months 60% of SA + death benefit if the Life value of units. Death after 1st

Assured is > 7 years or < 70 year-SA +value of units. Death years. during the 10th year- 105% of SA + value of units.

Partial
Withdrawal Benefit

or at

complete Premature withdrawal allowed bid price 1 year(after applying bid-offer spread).

withdrawals after3rd year.

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Contribution

Minimum: Rs. 15,000 p.a

Not specified.

Flexibility

to Only

an

increase

in Not available.

increase/decrease contribution

contribution is allowed.

Investment options

Equity Fund, Debt Fund, Balanced, Secured & Risk. Balanced Fund, Cash Fund.

Increase/Decrease Available. of death benefit

Not available.

Bonus Points

Not Available.

Not available.

Top-up

Available.

Available (charges: 1.5% of the top-up).

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Switch

3 free switches every policy No free switches. Cost of year. Subsequent switches switches is 2% of the fund would be charged @1% of value. switch amount or Rs. 100 whichever is higher.

Surrender Value

selling/purchase of 5% will

price Partial surrender up to 50% be of bid value of units allowed

spread

applicable from the 3rd year after 3 years from the date of onwards. commencement.

Automatic Cover Available after the 3rd policy Not available. Continuance year.

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Charges :
Initial charge

Not disclosed

1st Year- 24% ; 2nd Year-3% 3rd Year- 3%. No charges grom 4th year onwards.

Admin charges

Annual admin. Charges of 1.25% of net assets.

Other charges

Transaction charge of Not applicable. 0.5% of the equity

investment & 0.1% of the debt investments.

Bid-offer spread

The bid-offer spread is Not applicable. 5% of the offer price.

Fund management Annual investment charge of Charge 1% p.a. of net assets. 1% of the fund per annum

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ABR/ ADBR / CI/Hospital In Built Accident Benefit. Riders Cash Benefits.

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CHILD CARE Vs SMART KID (ICICI Pru.

FEATURES

CHILD CARE

SMART KID

Plan Type

Anticipated Endowment.

Anticipated Endowment.

Min Max Term Matures when the child reaches theMatures between 22-25 years of age of 21 or 24. Premium paid till child. Term is 10-25 tears. child reaches age 18.

Min Max Age 1-13 Years. of Child

0-12 Years.

Min Max Age 20-50 Years. of Parent

20-60 Years.

Payment Modes

All regular premiums.

All regular premiums.

Life Assured

Parent.

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Child is insured. But premium waiver rider available for parent.

Beneficiary

Child

Child.

Flexibility benefit structure

in 2 structures : 1. Money is paid on the 18th, 19th, 20th and 21st year (20%+25%+25%+35%) 2. Money is paid on the 18th, 20th, 22nd or 24th year (25%+25%+25%+40%)

2 structures : 1. When the child reaches the criteria milestones ( Xth, XIIth, Graduation, Post Grad.) 2. Last 4 year before maturity.

Benefit-Death of Parent

None if premium waiver rider is not SA is paid up front. Child gets th purchased. Guaranteed payments as chosen earlier.All future

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premiums are waived off.

Benefit- Death of Child

< 7 years Premiums refunded without interest >7 years & <18

Policy continues as it is.

Years SA + Bonus > 18 years Outstanding payments as a lump sum.

Bonus Additions

& Not guaranteed. Paid after the end of3.5% of SA compounded the premium paying term. annually for the1st 4 years, annual bonuses declared

thereafter.

Riders available

Family Income Rider/ Premium Waiver Rider.

ADBR / IBR

Surrender Value

Available after 3 premium paying Available after 3 premium years. paying years.

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34

CHILD CARE Vs HDFC CHILD PLAN

FEATURES CHILD CARE

HDFC CHILD PLAN

Plan Type

Anticipated Endowment.

Endowment.

Min Term

Max Matures when the child reaches the 10-25 Years. age of 21 or 24 Premium paid till child reaches age 18.

Min

Max 0-13 Years.

Age of Child

Min Age Parent

Max 20-50 Years. of

18-60 Years.

Payment

All regular premiums.

All regular premiums.

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Modes

Life Assured

Child is insured. But premium waiver parent. rider available for

Parent.

Beneficiary

Child.

Child.

Flexibility in 2 structures : benefit structure 1. Money is paid on the 18th, 19th, 20th and 21st year (20%+25%+25%+35%) 2. Money is paid on the 18th, 20th, 22nd or 24th year (25%+25%+25%+40%).

The customer has to choose amongst 3 separate plans, with deferring premiums

based on the plans.

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BenefitDeath Parent of

None if premium waiver rider is not purchased. Opt for either one of the plans: 1. SA+ Bonuses paid upfront 2. SA +

Bonuses paid on maturity. 3. SA paid on death & SA + Bonuses paid on maturity.

BenefitDeath Child of

< 7 years Premiums refunded without interest >7 years & <18

Policy continues as it is.

Years SA + Bonus > 18 years Outstanding payments as a lump sum

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Bonus Additions

& Not Guaranteed. Paid after the end of the premium Paying term.

Simple Reversionary Bonuses maturity. paid till

Riders available

Family Income Rider/ Premium Waiver Rider.None.

Surrender Value

Available after 3 premium paying years.

Available.

CHILD CARE Vs OM KOTAK CHILD ADVANTAGE

FEATURES

CHILD CARE

OM KOTAK CHILD ADVANTAGE

Plan Type

Anticipated Endowment.

Endowment.

Min

Max Matures when the child reaches the age of 21 10-30 Years.

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Term

or 24. Premium paid till child reaches age 18.

Min

Max 1-13 Years.

0-17 Years.

Age of Child

Min

Max 20-50 Years.

Age of Parent

Payment Modes

All regular premiums.

All regular premiums.

Life Assured

Child is insured. But premium waiver rider available for parent.

Parent.

Beneficiary

Child

Child. One structure only.

Flexibility in 2 structures : benefit structure 1. Money is paid on the 18th, 19th, 20th and 21st year (20%+25%+25%+35%)

Lump made

sum payment on maturity

which consists of SA

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2. Money is paid on the 18th, 20th, 22nd or or 24th year (25%+25%+25%+40%).

accumulated

bonuses, whichever is higher. If the child is 18(then

BenefitDeath Parent

None if premium waiver rider is not of purchased.

Sa paid,

or

Accumulation whichever Else is total

higher.

premium or SV is paid whichever is higher).

BenefitDeath Child of

< 7 years Premiums refunded without interest >7 years & <18

Policy continues as it is.

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Years SA + Bonus > 18 years Outstanding payments as a lump sum

Bonus Additions

& Not guaranteed. Paid after the end of the premium paying term. Not guaranteed.

Riders available

Family Income Rider/ Premium Waiver Rider.

ADBR, WOP.

Surrender Value

Available after 3 premium paying years.

Available.

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CHILD CARE Vs TATA AIG EDUCARE (18 YEARS)

FEATURES

SMART KID

TATA AIG EDUCARE

Plan Type

Anticipated Endowment.

Regular endowment

premium plan-

Positioned as a Child Plan.

Min Term

Max Matures when the child reaches the Matures when the child is Age of 21 or 24. Premium paid till 18 years of age. Child reaches age 18.

Min

Max 0-13 Years.

30 days to 8 years of age.

Age of Child

Min Age Parent

Max 20-50 Years. of

Not applicable.

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Payment Modes

All regular premiums.

All.

ChildLife Assured Child is insured. But premium waiver parent. rider available for

till

the

child

reaches the age 18 , the parent will be the

policyholder. At 18, the policy will be transferred in the childs name.

Beneficiary

Child

Child.

Flexibility in 2 structures : benefit structure 1. Money is paid on the 18th, 19th, Single payment structure. 20th and 21st year 20%+25%+25%+35%) 2. Money is paid on the 18th, 20th, 22nd or 24th year (25%+25%+25%+40%)

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BenefitDeath Parent

None if premium waiver rider is not Policy lapses in case payer of purchased. benefit rider is not opted for.

BenefitDeath Child of

< 7 years Premiums refunded without interest >7 years & <18

The proceeds are paid to the parent.

Years SA + Bonus > 18 years Outstanding payments as a lump sum

Bonus Additions

& Not guaranteed. Paid after the End of the premium paying term.

Guaranteed 10% of SA paid at maturity or death provided the policy has been in force for 10 years. Plus a guaranteed

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education benefit of 20% of the SA paid at the maturity.

Riders available

Family

Income

Rider/

Premium Payor

Benefit

Rider-

Waiver Rider.

premium waiver.

30% of the premiums paid(excluding the 1st

premium & extra premium Surrender Value Available after 3 premium paying , if any) provided 3 annual years. premiums have been paid in full.

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46

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OBJECTIVE Working of the unit-linked plans. Comparative analysis of the life insurance products available in the market. Research methodology used : Primary data collected by visiting the leading life insurance companies like LIC, ICICI Prudential, Aviva, Birla Sun Life Insurance, HDFC Standard Life, Tata AIG Educare, OM KOTAK Mahindra. Data Collection: (a) Questionnaires filled by various income groups. (b) Internet (by searching about the investment plans of other companies). Action plan:

(a) Firstly, collecting information from newspapers & magazines like Economic Times, Financial Express, Business India, The Times Of India, Internet.

(b) Secondly, getting the questionnaires filled (about 50) to find out which company they prefer for life insurance policies, what are the specific features of their policies, whether they treat insurance as an investment option or a security option.

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Finally, analyzing the data collected and comparing the insurance companies to show the market credibility of BAJAJ Allianz among other private life insurance companies.

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50

SOURCES OF DATA PRIMARY DATA Questionnaires. In depth interviews with the agents and managers of private life insurance companies. SECONDARY SOURCES Newspapers. Magazines. Internet sites.

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DATA COLLECTION
PRIMARY DATA The primary data are those data which are collected afresh and for the first time and happen to be original in character. The primary data to be collected for the study areBy Structured Questionnaire (Customer)

SECONDARY DATA Secondary data are those data which have already been collected by someone else and which already had been passed through the statically process. The secondary data to be collected for the study arePublication of the company Periodical of the company By Internet Websites

RESEARCH INSTRUMENT

STRUCTURED QUESTIONNAIRE: A Questionnaire consist of a number of questions printed or typed and a definite order on a form or set of forms. It is the set of questions presented to the retailers for their answers. When the questions have only two 52

alternatives or of multiple choice, then it is known as closed-end questionnaire, which is hence used the given study.

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SAMPLE AND SAMPLE SIZE:

In project I choose a finite population that is I chose a fixed number of elements (persons) so that it is possible to enumerate it in its totality. For instance, the population of the MEERUT region. From that population I made a sampling frame which consists of a list of items from which the sample is to be drawn. For instance, I choose that portion from the population those who having good contacts. From that sampling framework I choose my sample size. I choose 150 people as the size of the sample. From these sample size more than 140 people was responded. Following depicts all these analysis

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The all notation stands for: 1. Implies response, 2. Implies sample. 3. Implies sampling frame. 4. Implies population.

The gap between the response and sample is known as response error. The gap between the sample and sampling frame is known-as chance error. The gap between the sampling frame and population is known as frame error.

DATA COLLECTION METHOD: I have used my own database which consisted of student , shop keepers etc, Serviceman, retired person from reputed organization etc. After having all these I used to analyze the profile of those person and go forward to meet them individual. In my case what I had proceed on

behalf of the company, the list of given data base exhibit the following two aspects:

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FINDINGS AND ANALYSIS

There were about 10 questions in the questionnaire on the basis of which the findings were done and the analysis was made. The responses to the questions in the questionnaire are presented in the form of statistical tools such as pie charts and bar charts. There were 50 people being interviewed from different income groups and age groups.

1. Do you have a life insurance policy? If yes, then of which

company/companies?
PEOPLE HAVING INSURANCE POLICIES

28%
Yes

72%

No

% OF INSURED POPULATION IN VARIOUS COMPANIES

Bajaj Allianz
0% 6% 28%

LIC Max Newyork ICICI Pru

5% 3%

17%

TATA AIG
8% 33%

Birla sun life AVIVA

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Out of the 50 insurable people interviewed nearly 72% people have taken insurance policy. Out of this population being interviewed nearly 32 % had LIC policy, 28 % had Reliance Life, followed by ICICI Pru. (17 %), Max New York Life (8 %) , TATA AIG(3%), Birla Sun Life (6%), Aviva and HDFC having 6% shares each in the interviewed population.

2. Do you see insurance policies as an investment alternative or a security option?

PURPOSE OF INSURANCE

22%
Investment Alternative

78%
Security Option

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Out of the 50 people interviewed 78 % people term/see insurance policy as a security option while only 22 % see it as an investment option.

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3.Please rank the following as per your preference to investment in a financial year:

INVESTMENT PREFERENCES IN VARIOUS ALTERNATIVES

20 18 16 14 12 10 8 6 4 2 0
Shares Mutual Funds Life insurance Government Bonds

(No. of people)

(Investment alternatives)

Out of 50 being interviewed, 18 people invest in life insurance policies, 16 people invest in shares, 12 people invest in mutual funds and 4 people invest in government bonds.

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4.What is your criteria/criterion to select a particular insurance company and a scheme?

CRITERIA FOR SELECTING AN INSURANCE COMPANY

20 20 15 8 10 5 0 5 2 15

Security

Time span

Market share

Return

All of the above

Out of 50 people being interviewed, 15 people select an insurance company on the criterion of security, 5 people select an insurance company on the criterion of time span, 2 people select an insurance company on the criterion of market share, 8 people select an insurance company on the basis of return and 20 people select an insurance company on the basis of all the above mentioned reasons.

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5. Rank the preference :

life insurance companies in the your order of

FIRST PREFERENCE OF PEOPLE AMONG PVT. LIFE INSURANCE COMPANIES

BAJAJ Allianz

16% 14% 24%

46%

ICICI Prudential Max Newyork HDFC

Out of 50 people interviewed, 46% had Reliance Life as their first preference for a pvt. Life insurance company followed by ICICI Prudential having 24 % preference followed by HDFC Life insurance having 16% market share and lastly Max New York Life Insurnce.

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6. Do you think that private life insurance companies are as safe as LIC for taking a policy?

PERCEPTION OF PEOPLE ABOUT SAFETYNESS : LIC Vs PVT. LIFE INSURANCE COMPANIES

Yes 38% No 62%

Yes No

Out of 50 people being interviewed, 62 % of people do not find private life insurance companies to be safe for buying a life insurance policy whereas 38 % people find them safe for buying a life insurance policy from a private life insurance company.

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7. Reliance Life is quite a famous company because:

FAMOUSNESS REASONS OF BAJAJ ALLIANZ

POLICIES

16%
PARENT COMPANIES

40%

20%
MKTG. AND ADV. STRATEGIES

24%

All OF THE ABOVE

Out of 50 people interviewed, 16 % people perceive policies of Reliance Life make it a famous company while 20% think it is due to the parent companies, 24% take it as marketing and advertising strategies which appeal to the mass population while 40 % think it is all due to the above mentioned reasons that RELIANCE LIFE is a famous company.

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8. Are you satisfied with your existing policy/policies?

SATISFACTION LEVEL OF POLICY HOLDERS

Not satisfied 31%

Satisfied Not satisfied

Satisfied 69%

Out of 50 interviewed, 69% of the people were satisfied with their life insurance policies while only 31% of people were not satisfied.

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ANALYSIS

Analysis of a research project is based on the primary data and secondary data which is being collected from various sources to take out some conclusions of the research study being taken. In my project my purpose was to find the market credibility of Reliance Life among various other private life insurance companies. For this a population of 50 people was being interviewed having different lifestyles, different incomes, different occupations yet the point which was kept in mind was that this interviewed population was insurable.

The questionnaire filled up by people revealed that nearly 36 people i.e. about 72% people have life insurance policies. This is due to the fact that people now have started realizing that life is very uncertain and it is advisable to have a life insurance policy. Nearly, 24 % people had LIC policy and 20% people have Reliance Life as their life insurance policy. The reason that people have more LIC policy is that it is an old company for life insurance and secondly it is a government controlled organization. Secondly,

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when enquired about the perception of people about insurance policies, nearly 39 people i.e. about 78% people see it as a security option for their families financially so that if they are not alive some day, their family does not go in vain. While 11 people i.e. about 22% people see it an investment option to save taxes and get returns. Thirdly, when asked about their investments in various alternatives, 18 people gave life insurance policies their first preference for investment whereas 16 gave shares as their first preference followed by mutual funds (12) and lastly government bonds. This clearly shows that people are risk averse to a large extent as largest numbers of people like to invest in life insurance policies to make sure that there is security. Fourthly, when they were asked about the criterion of choosing a life insurance company 15 people replied that they see the security point of view to buy a life insurance company. 5 people chose time span as the criteria to choose a life insurance company. 2 people chose the market share of the company as the preferred criteria of choosing the life insurance company. 8 people chose the returns of life insurance companies as the criteria for choosing a life insurance

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company. Nearly, 20 people chose all the above mentioned reasons to choose a life insurance company.

When the sample population was interviewed about their 1st preference among the pvt. Players, nearly 46 % people chose Reliance Life as the 1st insurance company, 24 % people chose ICICI Prudential as the 1st preference, and 16 % chose HDFC as the 1st insurance company and 14 % people chose Birla Sun life as the 1st preferred company. When sample size was asked about safety ness of an insurance policy as compared to LIC policy nearly 62 % people replied that they do not find private life insurance companies as safe as LIC, this is due to the fact that LIC had monopoly into life insurance till 2000. Only after 2000, private companies have come in the field of Life Insurance Company. Proceeding further, when sample population was asked to recognize the punch line of Reliance Life nearly 60 % of the population was able to recognize the punch line of Reliance Life which clearly indicates that Reliance Life is a well known life insurance company among the people. Followed by it, when

sample size was interviewed about the reasons of famousness of

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Reliance Life 16 % of people chose its policies as the reason for its famousness, 20% people chose its parent companies as the reason for its popularity, 24 % agreed for its marketing and advertising strategies to be the prime cause of its popularity among masses. Whereas 40 % population agreed to all of the above mentioned reasons to be causes of the popularity of Reliance Life. When asked about the satisfaction with the existing insurance policies nearly 69% people said that they are satisfied with their policy whereas only 31% people were not satisfied with their policy. They wanted the additional features of transparency about the returns after when they have stopped paying the premiums. Also they wanted higher rate of returns at the end of payment of premiums.

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DIFFICULTIES FACED Following were the difficulties faced during the completion of project:

Non filling up of certain questions of the questionnaire which led to

the cancellation of that particular questionnaire.

Non understanding of certain parameters in the questionnaire. Taking a sample size of 50 people does not reflect the mindset of all
kinds of people from different backgrounds, different age groups and income groups.

Again research study of 2 months is a time constraint and covering

whole of Delhi population by taking a sample size of 50 is not feasible.

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FUTURE GROWTH & SUGGESTIONS

RELIANCE LIFE, in the present scenario is growing at an aggressive pace. The company does a lot of survey & analysis in the market to discover customers needs & expectations & tries to improvise on its existing market linked plans along with insurance policies. In addition to this , the company from time to time keeps on introducing various new policies & tailor made plans exclusively to cater peoples financial needs. This has enabled Reliance Life to become market leader in the sector of insurance & investment companies since 2001 when it came into existence. Since, now many other companies are joining the field of insurance & investments, it will be necessary for Reliance Life to vigorously pursue & update its survey & analysis policy to remain market leader. Simultaneously, it should discover & rediscover its strength by introducing new plans better suited to the people at large. India is a very big market & it can provide sustenance to all the companies in the field of insurance & investments but to remain one of the leading companies, Reliance Life has to adopt new strategies earlier than others. This could include widening the distribution networks to all parts of the country & catering to every income group. Furthermore, it can improvise on its advertisements & promotion campaigns by becoming more appealing & making them touches the hearts

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of millions & billions of Indians who are the hot prospects. Lastly, the students in the professional courses, apprentices, trainees may be good targets to approach in times ahead.

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CONCLUSION

The research project titled as COMPARITIVE ANALYSIS OF RELIANCE LIFE AMONG OTHER LIFE INSURANCE

COMPANIES enabled to understand the competition among the various life insurance companies which have entered Indian market of life insurance after 2000 when private life insurance companies were allowed to enter the Life insurance sector in India. Reliance Life is one of the companies in the private sector which are doing exceptionally good in this sector due to their policies to which people find very attracting according to their needs. When people were interviewed about the first preference among the private life insurance companies nearly 46% replied for Reliance Life, this clearly indicates that Reliance Life is quite a household name. The reasons for this are many like it is a company with very strong brand names: BAJAJ Auto Limited which is the no. 1 Automotive Manufacturer in India also Allianz AG is 3rd largest life insurance company in the world. The market share of Reliance Life also around 34% among private life insurance companies which is quite high among private life insurance companies. It is only second to LIC in the life insurance sector. 74

BIBLIOGRAPHY

Philip Kotlar, Marketing Management, New Delhi, Pearson Education (P) Ltd., Indian Branch, 2004.

C.R. Kothari, research Methodology, New Delhi, New Age International (P) Ltd.

WEBSITES

www.icicilife.com www.lic.gov.in www.hdfc.com www.kotak.com www.birlasunlife.com www.aviva.com

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