INTRODUCTION

1.1 INTRODUCTION OF INSURANCE

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 Every risk involves the loss of one or other kind. In older time, the contribution by the person
was made at the time of loss. Today, only one business, which offers all walks of life, is
insurance business. Owing to growing complexity of life, trade and commerce, individual
and business firms and turning to insurance to manage various risks. Every individual in this
world is subject to unforeseen uncertainties which may make him and his family vulnerable.
At this place, only insurance helps him not only to survive but also recover his loss and
continue his life in a normal manner.

Insurance is an important aid to commerce and industry. Every business enterprise involves large
number of risks and uncertainties. It may involve risk to premises, machinery, raw material and
other things destroyed due to fire or flood.

1.2 Insurance Industry

The insurance industry of India consists of 57 insurance companies of which 24 are in life
insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life
insurers there are six public sector insurers. In addition to these, there is sole national re-insurer,
namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian
Insurance market include agents (individual and corporate), brokers, surveyors and third party
administrators servicing health insurance claims.
Out of 33 non-life insurance companies, five private sector insurers are registered to underwrite
policies exclusively in health, personal accident and travel insurance segments. They are Star
Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max
Bupa Health Insurance Company Ltd, Relegate Health Insurance Company Ltd and Cigna TTK
Health Insurance Company Ltd. There are two more specialized insurers belonging to public

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sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and
Agriculture Insurance Company Ltd for crop insurance.
The future looks promising for the life insurance industry with several changes in regulatory
framework which will lead to further change in the way the industry conducts its business and
engages with its customers.

Early Methods:
Insurance 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 insurance fraud 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 have begun to take a more active role in loss mitigation, such as
through building codes.
1.3 Methods Of Insurance:-
 Co-insurance – risks shared between insurers
 Dual insurance – having two or more policies with overlapping coverage of a risk (both
the individual policies would not pay separately – under a concept named contribution,
they would contribute together to make up the policyholder's losses. However, in case of
contingency insurances such as life insurance, dual payment is allowed).
 Self-insurance – situations where risk is not transferred to insurance companies and
solely retained by the entities or individuals themselves.
 Reinsurance – situations when the insurer passes some part of or all risks to another
Insurer, called the reinsurer.

1.4 Insurance Of Principles:-

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
an insurable risk, the risk insured against must meet certain characteristics. Insurance as
a financial intermediary is a commercial enterprise and a major part of the financial services

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industry, but individual entities can also self-insure through saving money for possible future
losses.
 Insurability
Risk which can be insured by private companies typically shares seven common characteristics
(a) 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 ensuring
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.
(b) 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.
(c) 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.
(d) 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 losses. There is hardly
any point in paying such costs unless the protection offered has real value to a
buyer.

 Legal:
When a company insures an individual entity, there are basic legal requirements and regulations.
Several commonly cited legal principles of insurance include:

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 (a) Indemnity:
The insurance company indemnifies, or compensates, the insured in the case of certain losses
only up to the insured's interest.
(b) 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. The requirement of an insurable interest is what distinguishes
insurance from gambling.
(c) Utmost Good Faith:
 The insured and the insurer are bound by a good faith bond of honesty and fairness. Material
facts must be disclosed.

 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 three
types of insurance contracts that seek to indemnify an insured:

1. A "reimbursement" policy
2. A "pay on behalf" or "on behalf of policy
3. An "indemnification" policy
4. From an insured's standpoint, the result is usually the same: the insurer pays the loss and
claims expenses.
5. If the Insured has a "reimbursement" policy, the insured can be required to pay for a loss
and then be "reimbursed" by the insurance carrier for the loss and out of pocket costs
including, with the permission of the insurer, claim expenses
6. Under a "pay on behalf" policy, the insurance carrier would defend and pay a claim on
behalf of the insured who would not be out of pocket for anything. Most modern liability
insurance is written on the basis of "pay on behalf" language which enables the insurance
carrier to manage and control the claim.
7. Under an "indemnification" policy, the insurance carrier can generally either "reimburse"
or "pay on behalf of", whichever is more beneficial to it and the insured in the claim
handling process.
8. If the Insured has a "reimbursement" policy, the insured can be required to pay for a loss
and then be "reimbursed" by the insurance carrier for the loss and out of pocket costs
including, with the permission of the insurer, claim expenses

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  Exclusions:
Policies typically include a number of exclusions, including typically:

 Nuclear exclusion clause, excluding damage caused by nuclear and radiation accidents
 War exclusion clause, excluding damage from acts of war or terrorism.

1.5 Insurance Companies

Insurance companies may sell any combination of insurance types, but are often classified into
three groups:

 Life insurance companies, which sell life insurance, annuities and pensions products and
bear similarities to asset management businesses.
 Non-life or property/casualty insurance companies, which sell other types of insurance.
 Health insurance companies, which sometimes sell life insurance or employee benefits as
well.
General insurance companies can be further divided into these sub categories.

 Standard lines
 Excess lines

In most countries, life and non-life insurers are subject to different regulatory regimes and
different tax and accounting rules. The main reason for the distinction between the two types of
company is that life, annuity, and pension business is very long-term in nature – coverage for life
assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover
usually covers a shorter period, such as one year.

Insurance companies are generally classified as either mutual or proprietary companies. Mutual

companies are owned by the policyholders, while shareholders (who may or may not own
policies) own proprietary insurance companies.
Demutualization of mutual insurers to form stock companies, as well as the formation of a hybrid
known as a mutual holding company, became common in some countries, such as the United
States, in the late 20th century. However, not all states permit mutual holding companies.

Reinsurance companies
Reinsurance companies are insurance companies that sell policies to other insurance companies,
allowing them to reduce their risks and protect themselves from very large losses. The
reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer
may also be a direct writer of insurance risks as well.

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Captive insurance companies
Captive insurance companies may be defined as limited-purpose insurance companies
established with the specific objective of financing risks emanating from their parent group or
groups. This definition can sometimes be extended to include some of the risks of the parent
company's customers. In short, it is an in-house self-insurance vehicle. Captives may take the
form of a "pure" entity (which is a 100% subsidiary of the self-insured parent company); of a
"mutual" captive (which insures the collective risks of members of an industry); and of an
"association" captive (which self-insures individual risks of the members of a professional,
commercial or industrial association). Captives represent commercial, economic and tax
advantages to their sponsors because of the reductions in costs they help create and for the ease
of insurance risk management and the flexibility for cash flows they generate. Additionally, they
may provide coverage of risks which is neither available nor offered in the traditional insurance
market at reasonable prices.
The types of risk that a captive can underwrite for their parents include property damage, public
and product liability, professional indemnity, employee benefits, employers' liability, motor and
medical aid expenses. The captive's exposure to such risks may be limited by the use of
reinsurance.
Captives are becoming an increasingly important component of the risk management and risk
financing strategy of their parent. This can be understood against the following background:

 Heavy and increasing premium costs in almost every line of coverage

 Difficulties in insuring certain types of fortuitous risk
 Differential coverage standards in various parts of the world
 Rating structures which reflect market trends rather than individual loss experience
 Insufficient credit for deductibles or loss control efforts

1.6 Insurance Regulatory And Development Authority

The Insurance Regulatory and Development Authority of India (IRDAI) is an
autonomous, statutory body tasked with regulating and promoting the insurance and re-
insurance industries in India. It was constituted by the Insurance Regulatory and Development
Authority Act, 1999, an Act of Parliament passed by the Government of India. The agency's
headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001.

Structure & Functions:

Section 4 of the IRDAI Act 1999 specifies the authority's composition. It is a ten-member body
consisting of a chairman, five full-time and four part-time members appointed by the government
of India. At present ( 1 Sept, 2018 ), the authority is chaired by Dr. Subhash C. Khuntia and its
full-time members are Mrs T.L.Alamelu, K.Ganesh, Pournima Gupte, Praveen Kutumbe and
Sujay Banarji.

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The functions of the IRDAI are defined in Section 14 of the IRDAI Act,
1999, and include:

 Issuing, renewing, modifying, withdrawing, suspending or cancelling registrations

 Protecting policyholder interests
 Specifying qualifications, the code of conduct and training for intermediaries and agents
 Specifying the code of conduct for surveyors and loss assessors
 Promoting efficiency in the conduct of insurance businesses
 Promoting and regulating professional organizations connected with the insurance and re-
insurance industry
 Levying fees and other charges
 Inspecting and investigating insurers, intermediaries and other relevant organization’s
 Regulating rates, advantages, terms and conditions which may be offered by insurers not
covered by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4
of 1938)
 Specifying how books should be kept
 Regulating company investment of funds
 Regulating a margin of solvency
 Adjudicating disputes between insurers and intermediaries or insurance intermediaries
 Supervising the Tariff Advisory Committee
 Specifying the percentage of premium income to finance schemes for promoting and
regulating professional organizations
 Specifying the percentage of life- and general-insurance business undertaken in the rural
or social sector
 Specifying the form and the manner in which books of accounts shall be maintained, and
statement of accounts shall be rendered by insurers and other insurer intermediaries.

1.7 Why ‘Sabse Pehle Life Insurance’?

Sabse Pehle Life Insurance' is India’s first Life Insurance awareness campaign. The Life
Insurance Council along with 24 Life Insurance companies, through this campaign aims to
educate the Indian audience about the importance of owning a Life Insurance policy.
As adults, we have been always taught to stress on the most essential things first, and then
prioritise the rest accordingly. Building up from the same cultural nuance, 'Sabse Pehle Life
Insurance' explains to us how buying Life Insurance should be the first step to building a robust
financial plan, and therefore should be seen as a fundamental requirement in our lives.
Why do I need Life Insurance?

A Life Insurance policy ensures that your family is financially secured in the event of something
unfortunate happening to you. A policyholder gets into a contract with the insurance company
wherein the company agrees to pay a large sum of money to the policyholder’s family on the

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event of the life insured passing away. The policyholder pays premium to the insurance company
in exchange.
Buying Life Insurance has the following benefits:

 It offers financial security to your loved ones and protects them from financial burden
 Takes care of life goals such as child’s higher education, marriage, etc.
 It helps save on tax, as premiums paid towards a Life Insurance policy is eligible for tax
deduction under Section 80C up to a limit of Rs.1.5 lakh

What led to the ‘Sabse Pehle Life Insurance’ campaign?

Simply put, a lot of people buy Life Insurance to save on taxes little knowing Life Insurance is
capable of securing the lives and dreams of their loved ones. Even though there is a considerable
amount of people with Life Insurance policies, understanding the real purpose of needing a Life
Insurance policy is low.
It's important for everyone to know that Life Insurance is in fact the only financial instrument
that provides protection to families in unfortunate eventualities.
The ‘Sabse Pehle Life Insurance’ campaign is thus a simple initiative to stress on the importance
of buying a Life Insurance policy.
1.8 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE
ECONOMY
The Life Insurance Industry has an enviable track record among public sector units. It has a
Consistent profit and dividend paying record accompanied by a steady growth in its financial
resources. Through investments in the Government sector and socially- oriented sectors the
Industry has contributed immensely to the nation's development. The industry is recognized as
one of the largest financial Institutions in the country. The ventures initiated by the industry in
the areas of Mutual Fund,
Housing Finance has done exceedingly well in recent years. To protect the country's foreign
exchange reserves, the reinsurance arrangement are so organized that maximum retention is
made possible within the country while at the same time protecting interests of the policy
holders.

CURRENT SCENERIO
With largest number of life insurance policies in force in the world, insurance happens to be a
mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and
presently is of the order of Rs.450 billion. Together with banking services, it adds about 7 per
cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds
available with LIC for investment are 8 per cent of GDP.
Yet, nearly 80 percent of Indian population is without life insurance cover while health insurance
and non-life insurance continues to be below international standards. And this part of the

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population is also subject to weak social security and pension systems with hardly any old age
income security. This it is an indicator that growth potential for the insurance sector is immense.
A well-develop and evolved insurance sector is needed for economic development as it provides
long term funds for infrastructure development and at the same time strengthens the risk taking
ability. It is estimated that over the next ten years India would require investments of the order of
one trillion US dollar. The insurance sector, to some extent, can enable investment in
infrastructure development to sustain economic growth of the country. Insurance is a federal
subject in India. There are two legislation that govern the sector - The Insurance Act-1938 and
The IRDA Act-1999.
In India, insurance is generally considered as a tax-saving device instead of its other implied long
term financial benefits. Indian people are prone to investing in properties and gold followed by
bank deposits. They selectively invest in shares also but the percentage is very small. Even to
this day, Life Insurance Corporation of India dominates India insurance sector. With the entry of
private sector players backed by foreign expertise, Indian insurance market has become more
vibrant. Business is becoming increasingly vulnerable due to wide variety of risk particularly
after September 11, 2001 disaster in which twin tower located in the hearts of New York city
were crashed by terrorist attack resulting in loss of 6000 human lives as well as financial loss to
the extent of $45 billion. The impact of this terrorist attack has created new horizon of risk to the
business world today.
However, rapid changes in the global economy, development of technology and e-business
already gathered momentum. Increased dependency on technology has originated new risks that
have resulted in well-published incidents. Computer hackers obtaining credit card information
from visa and Power-Gen, the love bug virus, cyber extortion, web content liability, professional
errors and omissions, computers and other crimes and activities such as terrorism, kidnapping
and company’s executive and extortion of money, commercial liability etc have significant
impact on business resulting in extreme financial loss, commercial embarrassment or regulatory
implications.
Corporation insurance/risk managers, under the circumstances, have to demand increasingly
complex insurance products. They have to be more attentive and knowledgeable about emerging
risks, how those risks are managed effectively and efficiently, and how they could ultimately
affect a company’s financial situation and therefore its position in the market place. In short, how
such risks are managed and can give to an insured a competitive advantage.
In the changing times, adoption of e-commerce into business models, the integration of web-
based communication and data transfer capabilities into the business operations, and leveraging
of advanced network and technology architecture for maximum benefit are the new horizon of
the risks. For the corporate insurance/risks managers, these new exposure-cyber-risks-can lead to
cyber losses, widening the interpretation of what constitute insure property damage, particularly
as it relates to information technology and data.
All the while, organizations are tremendous pressure to reduce expenses and increase profit
margin, and cannot afford to suffer a property loss of business interruption due to any cause

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(risk). How a company identifies, quantifies, qualifies and manages these new risks exposure, in
addition to the well-known tradition risks, is becoming an important factor in creating
shareholders value. This often means changing the way. Everyone in the organization have to
think about risk.
Insurance managers are seeing price levels (premium) continue to rise-albeit modestly-in today’s
primarily commercial property and reinsurance markets. They are demanding that insurers
improve their risk assessment and quantification offerings so that an insured may avail the
benefit in cost (premium rate) on account of well-managed risk.
The good news for insurance managers is that as the economy evolves, insurers are increasingly
matching that evaluation with new products, services and capabilities due to opening up the
insurance market to the private players.
Insurers who are truly listening to their customers and striving to be more in tune with their
needs are responding to the fast changing corporate insurance and risk management landscape.
They are listening to their customers. They are making fresh approaches to address the new
challenges faced by insured organization by designing the new products as per the needs. Insurers
are providing value added services to insured to protect the value created by the business.

RLIC offers wide range of innovative life insurance products, targeted at individuals and groups.
It offers need based products that caters to four distinct segments namely protection, child,
retirement and investment plans. RLIC is committed to emerge as a transnational Life Insurer of
global scale and standard.

1.9 Types Of Life Insurance In India

Life insurance products come in a variety of offerings catering to the investment needs and
objectives of different kinds of investors. Following is the list of broad categories of life
insurance products:

 Term insurance policies

The basic premise of a term insurance policy is to secure the immediate needs of nominees or
beneficiaries in the event of the sudden or unfortunate demise of the policy holder. The
policyholder does not get any monetary benefit at the end of the policy term except for the tax
benefits he or she can choose to avail of throughout the tenure of the policy. In the event of the
death of the policyholder, the sum assured is paid to his or her beneficiaries. Term insurance
policies are also relatively cheaper to acquire as compared to other insurance products.

 Money-back policies
Money back policies are basically an extension of endowment plans wherein the policyholder
receives a fixed amount at specific intervals throughout the duration of the policy. In the event of

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the death of the policyholder, the full sum assured is paid to the beneficiaries. The terms again
might slightly vary from one insurance company to another.

 Whole life policies

A whole life insurance plan covers the insured over his life. The primary feature of this product
is that the validity of the policy is not defined so the policyholder enjoys the life cover
throughout his life.

 Unit-linked investment policies (ULIP)

Unit-linked insurance policies again belong to the insurance-cum-investment category where one
gets to enjoy the benefits of both insurance and investment. While a part of the monthly premium
pay-out goes towards the insurance cover, the remaining money is invested in various types of
funds that invest in debt and equity instruments. ULIP plans are more or less similar in
comparison to mutual funds except for the difference that ULIPs offer the additional benefit of
insurance.

 Pension policies
Pension policies let individuals determine a fixed stream of income post retirement. This
basically is a retirement planning investment scheme where the sum assured or the monthly pay-
out after retirement entirely depends on the capital invested, the investment timeframe, and the
age at which one wishes to retire. There are again several types of pension plans that cater to
different investment needs. Now it is recognized as an insurance product and is regulated by
IRDA.
Seeking more investment in the insurance sector, on March 18, 2016, the government allowed
FDI in domestic insurance companies up to 49%, up from 26%, without the prior approval.
Earlier 26% FDI was approved through automatic route. For FDI up to 49% approval of Foreign
Investment Promotion Board is required subject to the verification of insurance regularity
authority of India. There are 57 insurance companies in India out of which 24 are life insurance
companies and 33 are general insurance companies.

1.10 Initial public offer (IPO) rules for Indian life insurance companies
A key piece of legislation impacting on the Life Insurance industries capital raising abilities is
the lock-in period of 10 years for investment to be limited to promoter group equity investments.
Under the Insurance Guidelines, Indian Life Insurance companies can opt for a public issue of
equity through an Initial Public Offer (IPO) after 10 years of operations.
In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI),
issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public
offer for sale of equity shares to the public.

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1.11 Insurer’s 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 = earned premium + investment income – incurred loss – underwriting expenses.
Insurers make money in two ways:

 Through underwriting, the process by which insurers select the risks to insure and decide
how much in premiums to charge for accepting those risks
 By investing 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
compare these prior losses to the premium collected in order to assess rate adequacy. [23] Loss
ratios 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 many
losses would therefore be charged twice as much. More complex multivariate analyses 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 minus the amount paid
out in claims is the insurer's underwriting profit on that policy. Underwriting performance is
measured by something called the "combined ratio", which is the ratio of expenses/losses to
premiums.[24] A combined ratio of less than 100% indicates an underwriting profit, 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. 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 2007, U.S. industry profits from float totalled $58 billion. In a 2009 letter to
investors, Warren Buffett wrote, "we were paid $2.8 billion to hold our float in 2008."
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. Reliance on float for
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profit has led some industry experts to call insurance companies "investment companies that
raise the money for their investments by selling insurance."[27]
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.
 Claims
Claims 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.
If a claims adjuster suspects under-insurance, 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 (see insurance bad faith).
 Marketing
Insurers will often use insurance agents to initially market or underwrite their customers.
Agents can be captive, meaning they write only for one company, or independent, meaning
that they can issue policies from several companies. The existence and success of companies
using insurance agents is likely due to improved and personalized service. Companies also

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 use Broking firms, Banks and other corporate entities (like Self Help Groups, Microfinance
Institutions, NGOs, etc.) to market their products.
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.

1.12 There are certain competitors of LIC & Reliance Insurance, following are:
Other competitors:-
 Bajaj Allianz Life Insurance

Bajaj Allianz Life Insurance began operations on 12

March 2001 and today has a pan-India presence of 759 branches. It is headquartered in Pune,
India. Bajaj Allianz Life Insurance received the Insurance Regulatory and Development
Authority (IRDA) certificate of Registration on 3 August 2001 to conduct Life Insurance
business in India.

 Max Life Insurance

15
 Max Life Insurance is a part of the Max India Ltd. Group. It is a joint venture between Max
Financial Services and Mitsui Sumitomo Insurance Company. The former owns 68% of the
company while the latter owns 26%. After forming the joint venture partnership with Mitsui
Sumitomo, Max Life changed its name from Max New York Life in 2012. In February 2016,
Axis Bank held a 6% share in Max Life.

 TATA AIG

Tata AIG General Insurance Company Limited (Tata AIG General)

is a business collaboration of the Tata Group and American International Group, Inc. (AIG).
Tata AIG General merges two major finance organizations: the Tata Group's prominent
headship place in India and AIG's global presence as the world's leading international
insurance and financial services organization. This joint venture has started its operations in
India from 22 January 2001. The company provides corporate and personal insurance
services.

 Aviva India

Aviva India is an Indian life assurance company, and a joint venture between Aviva plc, a British
assurance company, and Dabur Group, an Indian conglomerate. Aviva began operations in July
2002 as a joint venture with Dabur Group, one of India’s oldest business houses.
Aviva has a balanced distribution network through Assurance, Direct Sales Force and online
products. This includes a direct sales force of more than 9,000 financial planning advisors and
multiple banc assurance partnerships with private sector banks, co-operatives and regional rural
banks. Through its distribution setup and partnerships, Aviva reaches customers in over 1000
towns and cities across India.

16
Aviva has been focusing on the Online Platform in recent years, and a number of products,
including Aviva i-Life, Aviva Health Secure and Aviva i-Shield. This is in line with the
company’s strategy to focus on newer formats and products that are easier for customers to
understand and buy.

 Birla sun life insurance

Birla Sun Life Insurance Company Limited (BSLI) is a

joint venture between the Indian conglomerate Aditya Birla Group, and Sun Life Financial
Inc., an international financial services organizations from Canada. BSLI has a customer base
of over two and half million policy holders.

 IDBI Federal Life Insurance

IDBI Federal Life Insurance Co Ltd. is a three way joint-venture

of IDBI Bank, an Indian development and commercial bank; Federal Bank, one of India’s
leading[peacock term] private sector banks and Ageas, a multinational insurance giant based out
of Europe. In the year 2006, IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis
Insurance International NV signed a MoU to start a life insurance company in India. The
company received its license from Insurance Regulatory and Development Authority of
India (IRDAI) (j.Arul jegadeesh one of the trainee in the IDBI federal life insurance company
in Madurai) in December 2007.
IDBI Fortis Life Insurance Co. Ltd. officially began its operations in March 2008. In August
2008, the company collected the premium of over Rs.100 crore within a record time of five
months, thus becoming the fastest growing new life insurance company in the private sector.
India-Sri Lanka ODI series that took place in October 2009, found a title sponsor in
insurance major IDBI Fortis. The company’s AUM crossed the Rs.1000 crore mark for
the first time in March 2010.

17
In August 2010, the company was rechristened as IDBI Federal Life Insurance
Company. In 2012-13, it declared its maiden profits in record 5 years, thus was one of
the fastest to do so in the industry. It yet again clocked Rs.80 crore profits for the
financial year 2013-14 and has maintained its profitable trajectory from thereon.
IDBI Bank, an Indian development and commercial bank; Federal Bank, one of India’s
leading[peacock term] private sector banks and Ageas, a multinational insurance giant based out
of Europe. In the year 2006, IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis
Insurance International NV signed a MoU to start a life insurance company in India.

 Star Health & Allied Insurance:

Star Health and Allied Insurance Co Ltd commenced its operations in 2006 with the
business interests in Health Insurance, Overseas Med claim Policy (Travel Insurance) and
Personal Accident Insurance. Star Health is India's first stand-alone Health Insurance
Company. Star Health Insurance has products to cater everybody, be it individuals, families
or corporates. The Company works directly as well as through various channels like agents,
brokers, online etc., Star Health is also prominently into Banc assurance having long standing
relationship with various Banks. Star Health has underwritten a gross written premium of
Rs.5401 Cr during the FY 2018-19 and has built up a promising path with an appreciable net
worth of Rs.1480 Cr, as on 31st March 2019. Currently Star Health has 10600+ employees
and 500+ branch offices all over India.
HDFC Life insurance:

HDFC Life (HDFC Life Insurance Company Ltd.) is a long-term life insurance provider with its
headquarters in Mumbai, offering individual and group insurance.

18
It is a joint venture between Housing Development Finance Corporation Ltd (HDFC), one of
India's leading housing finance institution and Standard Life Aberdeen PLC, leading well known
provider of financial savings & investments services in the United Kingdom. On 14 August 2015
HDFC Ltd. entered into a share sale agreement with Standard Life to sell a 9.00% stake in
HDFC Life to the latter. The transaction is subject to receipt of regulatory approvals. Post the
completion of the above transaction, HDFC will hold 61.65% stake in HDFC Life and Standard
Life's stake will increase to 35.00%, with rest to be held by others.
 SBI Life Insurance:

SBI Life Insurance is a joint venture life insurance company between State Bank of India (SBI),
the largest state-owned banking and financial services company in India, and BNP
Paribas Cardiff. BNP Paribas is a French multinational bank and financial services company with
global headquarters in Paris. SBI owns 62.1% of the total capital and BNP Paribas Cardiff 22%
of the capital. Other investors are Value Line Pt. Ltd. and Mac Ritchie Investments Pt. Ltd.,
holding 1.95% of the total capital each and remaining 12% with Public. SBI Life Insurance has
an authorized capital of ₹20 billion (US$280 million) and a paid up capital of ₹10
billion (US$140 million).
In 2007, CRISIL Ltd, a subsidiary of global rating agency Standard & Poor's, gave company a
AAA/Stable/P1+ rating.

 Kotak Life Insurance:

Kotak Mahindra Life Insurance Company Limited is a private Life Insurance company

in India. The company was founded in 2001. It caters to 15 million customers with 232 branches
in around 167 cities and towns in India with 99,275 agents.

19
Under the umbrella, the company offers various protection plans, savings and investment plans,
child plans and retirement plans.The Kotak Mahindra Group was founded in 1985 as a provider
of financial services. In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group's
flagship company, received banking license from the Reserve Bank of India (RBI) to conduct
banking operations in the country and was renamed as Kotak Mahindra Bank Ltd, the parent
company of Kotak Life Insurance.

1.13 KEY HIGHLIGHTS OF RELIANCE INSURANCE

Documentation needed to apply for a Reliance Life Insurance
1. Identity Proof
2. Age Proof
3. Income Proof
4. Address Proof
5. PAN Number

1.14 Benefits of Reliance Life Insurance

With a comprehensive portfolio that covers a variety of life insurance plans that caters to the
financial needs of a diverse customer base, Reliance Life Insurance Company makes it relatively
easy to find the policy that perfectly meets your requirements. According to Brand Equity’s Most
Trusted Brand Survey 2015, Reliance Life Insurance Company ranked among the Top Three
Most Trusted Life Insurance Service Brands. Whether it is child plans, retirement solutions,
savings and investment plans, or protection plans, Reliance Nippon has made all kinds of plans
and policies available to individual entities as well as groups.

1.15 Different Types of Life Insurance Policies Offered by Reliance :

Reliance Life Insurance Company has emerged as one of the leading insurance providers in the
country for a reason, which, apart from its provision of quality products and services, is its knack
of designing a comprehensive set of insurance policies to ensure that the varying needs of a
diverse customer base are met with relative ease. Following are the different kinds of life
insurance policies sold by Reliance Nippon Life Insurance Company. Reliance Life Protection
Plans.
Reliance Life protection plans are diverse to meet the needs and requirements of a vast customer
base. Since the world is full of uncertainties and it is essential to ensure that our near and dear

20
ones are financially secure at all stages of their lives, protection plans gain prime importance as
they offer your family a lump sum amount to ensure that their financial needs are taken care of in
case of your untimely demise. Following are the protection plans offered by Reliance Life
Insurance Company.

1.16 How to Claim Insurance with Reliance:

Reliance Life Insurance Company has the highest claim settlement ratio among all private life
insurers in India. The company guarantees to settle your claims in only 12 days, and agree to pay
6.5% interest per annum for any delay on their part. In order to claim insurance with Reliance
Nippon, you will have to keep the following documents ready.

Documents required for Death claim:

 Claim form A: This form need to be filled by the nominee or claimant
 Claim form B - Certificate of last illness to be filled, signed and stamped by the doctor in
attendance during the last illness of the deceased life assured Original policy documents.
 Original death certificate by Death and Birth Registrar Death certificate by the doctor.
 Nominees photo identification card copy attested by Insurance company official.
 All hospital reports, if hospitalized during the last sickness
 Post Mortem Report and Viscera report, if performed.

Insurance’s Market Share in Comparison of Other Private company

If we look at the status of Reliance Life Insurance’s market share in comparison of other private
company in comparison of premium earned:

21
 Reliance Claim Settlement Ratio:

Total Total Total Total

Claim Claim Claim Claim
Premiu Premiu Premiu Premiu
Settleme Settleme Settleme Settleme
m in m in m in m in
nt Ratio nt Ratio nt Ratio nt Ratio
Crores Crores Crores Crores
(2016- (2015- (2014- (2013-
(2018- (2018- (2017- (2015-
17) 16) 15) 14)
19) 17) 16) 14)

4398.1 4621.0
4026.82 4283.4 94.53% 93.82% 83.84% 81.97%
2 8

1.17 Reliance Life Insurance Customer Care:

Reliance Life Insurance is one of India’s leading insurer’s offering a variety of attractive life
insurance plans. Handling a large volume of customers, the insurer has ensured to set up a
dedicated customer care department which assists customers with all queries, issues and
complaints they may have relating to their policy. The insurer has set up various channels via
which customers can get in touch with the support staff at Reliance. Customers can call on the
24x7 customer support helpline, register their details on the website to get a call back, and also
write to the customer care department on the email address provided.

KEY HIGHLIGHTS OF LIFE INSURANCE COMPANY:

Documentation needed to apply for an LIC Life Insurance
1. Identity Proof
2. Age Proof
3. Income Proof
4. Address Proof
5. PAN Number

22
1.18 Why To Opt For LIC Life Insurance Plans?
Customers and counting. In India, LIC is synonymous with life insurance with some of the most
reasonably rated premiums and sufficient coverage options, regardless of which walk of life an
individual belongs to. The brand name is not the sole LIC is said to be the largest life insurance
company in the world with 23 crore reason one should opt for LIC since it is not ideal to rely on
life insurance products from a single brand. Here is why one should opt for LIC as a life
insurance provider:
 Technologically superior Network: LIC has been the leader as an insurance provider for
its efforts to stay ahead of the game by being at par if not better in terms of its network
when it comes to providing advanced and efficient services with over 2000 branch offices
and 156 satellite branches. The company uses technology such as WAN, IVRS,
LAN,IVRS & even EDMS which allows people to go paperless when dealing with
insurance documentation.
 Not Alone in the Game: The company does not work alone but partners with insurance
and financial tycoons including NSE, LIC Mutual Fund, NCDEX, Stock Holding
Corporation of India, Insurance institute of India and National insurance Academy among
many similar organizations. Hence, it is working through convergence as well.
 Going International: It has fully functional offices in countries such as Nepal, Sri
Lanka, .Saudi Arabia and Bahrain. LIC has also been ambitious enough to plan opening
offices in Australia, Canada and USA.
 Product Variety: You will soon discover from the below given list that this company
boasts of one of the highest number of policy types available in life insurance alone. It
has the largest portfolios when it comes to life insurance group schemes to be one of their
highlights. They have a huge clientele of corporates for group insurance.
 Innovation in the Industry: The company’s launches new products every other quarter
and they are mostly to serve the society than to make profits although they are doing
pretty well as an insurance company, financially. They were the first to launch micro-
insurance products so that people living below the poverty line in India could afford
insurance for a certain amount of discount.
 Performance in The Stock Market: When it comes to stock market positioning, LIC
stocks are one of the most stable stocks available in the BSE. Some of the most well-
performing stock lists almost always feature this company especially when it comes to
insurance providers.

23
 Types of Plans Available From LIC:

Plan Type Basic Sum Assured Term

LIC Single Premium Endowment Plan Rs. 50,000 25 years

LIC New Endowment Plan Rs. 1 lakh 35 years

LIC’s New Jeevan Rakshak Rs. 1 lakh 20 years

LIC’s Limited Premium Endowment

Rs. 3 lakhs 21 years
Plan

New Jeevan Anand Rs. 1 lakh 35 years

LIC’s Jeevan Labh N.A. N.A.

LIC’s Jeevan Pragati N.A. N.A.

1.19 LIC Withdrawn Plans:

1. Fortune Plus
2. LIC New Jeevan Suraksha-I
3. Jeevan Vriddhi
4. LIC Jeevan Vaibhav (Single Premium Endowment Assurance Plan)
5. Jeevan Sugam

24
6. Two Year Temporary Assurance Policy
7. LIC Mortgage Redemption
8. Flexi Plus
9. CDA Endowment Vesting At 21
10. CDA Endowment Vesting At 18
11. Profit Plus
12. Jeevan Varsha
13. Child Fortune Plus
14. The Whole Life Policy- Limited Payment
15. Health Protection Plus
16. Jeevan Arogya
17. Market Plus

1.20 LIC Life Insurance Customer Care:

LIC or Life insurance Corporation has been India’s largest life insurance provider for several
decades. The insurance giant has not only issued millions of policies over the years but also has a
record of satisfied customers. This achievement has been made possible only with the help of
efficient and dedicated customer support service that the insurer offers to its policyholders.
Getting in touch with an LIC customer are representative is easy and can be done by calling on
the designated helpline number or by writing in to the company at the provided email address
. Customers and counting. In India, LIC is synonymous with life insurance with some of the
most reasonably rated premiums and sufficient coverage options, regardless of which walk of life
an individual belongs to. The brand name is not the sole LIC is said to be the largest life
insurance company in the world with 23 crore reason one should opt for LIC since it is not ideal
to rely on life insurance products from a single brand. Here is why one should opt for LIC as a
life insurance provide.

1.21 S.W.O.T ANALYSIS

SWOT analysis is the analysis of the internal and external factors, which have impact on the
survival of organization.
Now let’s make SWOT analysis for reliance life insurance and life insurance co.

Reliance Life Insurance Company.

Strengths
 Reliance life insurance company ltd.is the part of reliance capital
 The brand name is enough to sell the products easily.
 Strong liquidity from FII was the major reason for up move.
 Range of products

25
  Reliance has a long and strong history of solvency, financial stability.

The biggest strength of the organization:

 Money power which makes them ignorant about the gestation period
 Brand image , business experience and innovative products
 Large network branches which is helped to customer for the payment.

WEAKNESS:-
 Newly established company, so people seems it risky.
 Lack of staff
 Lack of advertisement, so most of the customers are not aware for the insurance.
 High targets for the financial advisors and for the sales department
 Try to catch middle-lower level people also.

OPPURNITIES:-
 There is a vast untapped market in India. The life insurance penetration in India is
approximately 2.5% so it has large potential.
 The average insurance premium being collected by the company has been growing
exponentially build up a target fund.
 Reliance life insurance should give the insurance coverage both to the parent and child.

THREATS:-
 The main threat is from the other players who have grabbed approximately 15%of the
market share.
 As the government has scrapped the rebate on the life insurance premium, the people
who used to invest in life insurance for sole motive of tax benefit may turn to other
investment.
 Current government policies do not encourage domestic saving.

1.22 Life insurance company

Life Insurance Corporation of India or LIC as it is popularly known as a government-owned
insurance and Investment Company. With headquarters in Mumbai, LIC is credited with being
the largest insurance provider in India with the value of an approximate asset to the tune of 240
billion USD. The total life fund of LIC is estimated at143 billion USD and the company still
continues to sell policies worth millions yearly.

1.23 SWOT analysis of LIC :

Strengths are defined as what each business does best in its gamut of operations which can give
it an upper hand over its competitors. The following are the strengths of LIC are:
26
  India’s largest Insurance service provider: LIC currently has pan India operations with
2048 fully computerized branch offices, 8 zonal offices, around 113 divisional offices,
2,048 branches and 1381 satellite offices and corporate offices. The entire country is
classified under 54 customer zones and 25 metro-area service hubs based across various
cities and towns of India. Currently, LIC has 1,337,064 individual agents, 242 Corporate
Agents, 89 Referral Agents, 98 Brokers and 42 Banks for selling life insurance to the
general public.

 Brand Image: LIC has a strong branding in India. Its tagline Yogakshemam
Mahamyaham which means welfare for all is well recognized. The Economic Time
Brand Equity Survey of the year 2015 voted LIC as the most trusted Insurance provider
in India.

 Fund Base: LIC has a huge found base of around 150 billion USD and is also India’s
biggest investor making it immensely powerful in the domain of finance in India.
 A network of Agents: LIC has around 1,337,064 individual agents, 242 Corporate
Agents, 89 Referral Agents, 98 Brokers and 42 Banks across India who cover each nook
and corner of the country.

Weaknesses in the SWOT analysis of LIC:

Weaknesses are used to refer to areas where the business or the brand needs improvement. Some
of the key weaknesses of LIC are
Culture: LIC has been strongly associated with the government and thus follows a very slack
and slow paced work culture. This works as a weakness when compared to modern-day private
insurance players who are adept at strategy.
Poor advertisement strategy: In comparison to its private counterparts LIC does not spend too
much on advertisement and this shows in the quality of ads that they release.
Too many restrictions: The Company has a lot of restriction imposed on ti being a government
entity and there is always red tape challenges. This makes decision making slow at LIC.

Opportunities in the SWOT analysis of LIC:

Opportunities refer to those avenues in the environment that surrounds the business on which it
can capitalize to increase its returns. Some of the opportunities include:
Cybersecurity: There are many cases of information threats and breaches in security systems.
Thus at an age where cybersecurity is a threat Insurance policies against this can prove to be a
huge opportunity.
Online Services: As online services grown people have started looking more into options like
insurance and the awareness levels are also higher than the earlier days.

27
  A network of Agents: LIC has around 1,337,064 individual agents, 242 Corporate
Agents, 89 Referral Agents, 98 Brokers and 42 Banks across India who cover each nook
and corner of the country.

Cybersecurity: There are many cases of information threats and breaches in

security systems. Thus at an age where cybersecurity is a threat Insurance policies
against this can prove to be a huge opportunity.
Online Services: As online services grown people have started looking more into
options like insurance and the awareness levels are also higher than the earlier
days.
Shift from protection to prevention: There is a general shift of trend from protection to
prevention which is a pointer for insurance companies who should now be focusing on risk
prevention than risk mitigation policies.
More disposable income: Insurance today is seen not as a protection but also as a form of
investment. By capitalizing on this new approach insurance companies can design new products.

Threats in the SWOT analysis of LIC:

Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:-
Competition: With privatization of insurance LIC has lost its older glory and today faces stiff
competition from private insurance players who have brought in more glamour into the industry.
Change of governments: With every new government the fiscal and monetary policies change
with the result that policies need to be reworked accordingly. This creates a lot of hassles.
Technology: Today most financial services make technology an integral; part of their business
through online banking and financial broking services online. However, LIC still has a lot to
achieve in terms of staying abreast with technology. There is a general shift of trend from
protection to prevention which is a pointer for insurance companies who should now be focusing
on risk prevention than risk mitigation policies.

28
29
PRIMARY DATA:
o Designing of interview questionnaire for consumers based on
various brand awareness parameters.
o Sample selection on basis of area.
o Data collection by primary survey of consumers by questionnaire
method.
o Analysis of data.
o Drawing conclusions.
SECONDARY DATA:
 Finding about the insurance industry in India.
 Finding about Reliance Life Insurance and its competitors.
 Understanding the various factors that need to be found out to
assess the brand awareness in the market.
The secondary sources will help in the historical framework of insurance
companies of post independent India as well as the pre-privatization and
post-privatization insurance environment in India. This secondary study

30
will help in serving the theoretical groundwork for the study. Data
collected from reliance life insurance and other insurance companies.
www.insurance.lic.in
Today, after 33 years of privatization of the mutual fund industry, UTI
has been pushed to the fifth slot in terms of assets under management.
www.livemint.com
Digitization, including use of artificial intelligence and internet of things
with an aim to enhance customer experience at all touch points,
innovations that address the savings and return mind-set of Indians and
offer wellness based incentives, and government’s commitment towards
Universal Health Coverage have marked 2017 in Indian health insurance
sector.
LIMITATIONS:
 The sample size for the survey is limited to respondents.
 The time horizon for the second part of the research to view the
effectiveness of the promotional activities in short.
 The respondents may be biased. Thus, rational analysis may not be
possible
SAMPLING SIZE:
It refers to the number of people surveyed for this, in this study 100
people were surveyed & response drawn.

31
 To carry out nation-wide, Danish non-life and life insurance and
pension fund business.
 To be attractive to customers by being a competitive independent
and pre-eminent insurance group.
 To improve our position in the Danish insurance market.
 To ensure that our expense ratio is lower than the general market.
 To ensure that our growth in non-life and life insurance as well as
pension fund business is higher than that of the market.
 To attract and keep profitable customers by delivering a high level
of customer service.

32
DATA ANALYSIS
All the observation are based upon the primary data collected through
questionnaire filled by students of college. The observation made on
both customers’ s or students questionnaire is dealt sperately .
Observation based on customer’ s questionnaire
The customer’s questionnaire is attached with it and as we can see it
consists of different question related to insurance companies and its
personal details area for knowing respondent’s particulars. The
questionnaire consist mainly closed-needed question with a single open-
ended question.
The questionnaire is divided into 2 categories meant for both reliance
companies or life insurance cooperation .
As the questionnaire was long but consist of closed-ended question
where only a choice of 2 or ranking is to be done , filling them was less
time consuming and customers have taken interest in filling them.

33
The observation are done question wise let see it below:-
GENDER:
Gender plays a vital role in purchase decisions. Gender is classified on
sex basis i.e. male and female. Gender classification is requiring to
marketer because different gender exhibit different perception towards
products.
Sex No. of respondents Percentage%
Male 35 35
Female 65 65
Total 100 100
Source: Primary Data

Interpretation:
35% of the respondents are male and 65% of the respondents are female.
From the above table we can
conclude that, the majority of the respondents were belongs to female
group.

34
 Sales

Male Female

Occupation:
Occupation is also influences a person’s consumption pattern. Similarly
the insurance taking by various occupants. The following occupants of
the respondents are classifies for the data collection.
occupation No. of respondent Percentage

35
Self employed 20 20
Professional 10 10
House wife 65 65
Students 05 05
Total 100 100
Interpretation:
20% of the respondents are selfemployed, 10% of the respondents are
professional , and 65% of therespondents are house wives, 05% of the
respondents are other group.

Sales

self employed professional house wifes students

Q1. Which insurance you are taking?

Insurance No. of respondent Percentage%
Reliance 40 40
LIC 54 54
Others 06 06
Total 100 100
36
Interpretation:
40% of respondent taking reliance insurance, 54% of respondent taking
n qLIC , 6% of respondent taking others.

Sales

reliance LIC Others

Q2. What is the most important factor that matters while taking
insurance?
Factors No. of respondents Percentage

Quality 23 23
Price 13 13
Service 57 57
Others 7 7
Total 100 100

Interpretation:
23% of respondent depend upon quality of insurance, 13% of respondent
depend upon price of the insurance, 57% of respondent depend upon
service of the insurance, and 7% depend upon others.

37
 Sales

quality price service others

Q3. How did come to know about the insurance company?

Opinions No. of respondent Percentage%

By friends/family 64 64
T.V. Ads 14 14
Others 22 22
Total 100 100

Interpretation:
64% of respondent are know about the insurance by friends/family, 14%
of respondent are know about the insurance, 22% of respondent are
know about the insurance by others.

38
 Sales

by families/friends t.v. ads. others

Q4. Are you satisfied with quality of the insurance?

Satisfaction No. of respondent Percentage%

Yes 90 90
No 10 10
Total 100 100

Interpretation:
90% of respondent are satisfied with quality of the insurance and 10% of
respondent are not satisfied with quality of insurance.

39
 Sales

yes no

Q5. What is more important in life insurance policy?

Features No. of respondent Percentage %

Feature of the policy 43 43

Name of the company 12 12

Cash incentive 45 45

Others 24 24

Total 100 100

Interpretation:
43% of respondent like feature of the policy, as follows.

40
 Sales

feature of the policy name of the company cash incentive others

Q6. Which according to you is the largest company in the life insurance
company in private sector?
Company No. of respondent Percentage%

Reliance 60 60

ICIC pru 15 15

Tata AIG 20 20

Others 5 5

Total 100 100

41
 Sales

reliance icic pru tata AIG others

Q7. Which insurance you currently taking?

Insurance No. of respondent Percentage%

Reliance 28 28

LIC 52 52

Max life 15 15

Others 5 5
Total 100 100

42
Interpretation:
28% of respondent using reliance, 52% of respondent using LIC, 15% of
respondent using max life and 5% of respondent using others.

Sales

reliance LIC Max life others

Q8. Do you have reliance life insurance policy?

Policy No. respondent percentage%

Yes 58 58

No 42 42

Total 100 100

43
Interpretation:
58% of respondent are using reliance policy and 42% of respondent
using other policy .

Sales

yes no

Q9. Do the various schemes/promotional activities affect your purchase.

Activities No. of respondent Percentage%

Yes 75 75

No 25 25

Total 100 100

44
Interpretation:
75% of respondent affect by activities and 25% of respondent are not
affected by activities.

Sales

yes no

Q10. What is your opinion about insurance company?

Opinion No. of respondent Percentage%

Outstanding 45 45

Excellent 25 25

Good 28 28
Average 2 2

Total 100 100

45
Interpretation:
45% of respondent opinion are outstanding, 25% of respondent opinion
are excellent, 28% of respondent opinion are good, and rest of opinion
are average.

Sales

outstanding excellent good average

Q11. Do you think the price of policies of insurance companies is

high/low compared to competitors?
Opinion No. of respondent Percentage%

Very high 15 15

High 25 25
Average 60 60

Total 100 100

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Interpretation:
15% of respondent opinion are very high , 25% of respondent opinion
are high , 60% of respondent opinion are average.

Sales

very high high average

Q12. Do you various schemes/promotional activities affect your

purchase plans?
Activities No. of respondent Percentage%

Yes 30 30

No 70 70
Total 100 100

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Interpretation:
30% of respondent are affected by activities , 70% of respondent are not
affected by activities.

Sales

yes no

Q13. The most favorable life insurance scheme of the bank?

Schemes No. of respondent Percentage %
I – life plan 60 60
Finance 15 15
Sampoorn Raksha 5 5
plan
Online term plan 20 20
Total 100 100

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Interpretation: 60% of respondent use I life plan , 15% of respondent
use finance , 5% respondent use sampoorn Raksha plan , 20%
respondent use online plan .

Sales

I life plan finance sampoorn raksha plan online term plan

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FINDINGS OF THE STUDY :-
The present study area namely, Sivakasi offers vast scope for the
marketing of
general insurance as most of the industries located in it. They are
transporting finished
goods and purchase their raw materials throughout India using
various transport modes.
The growth and development of small scale industries in the study
area is promising and
thus offers large scope to enlist the new and small entrepreneurs as
general insurance
policyholders. An approximate calculation of the potential demand
brings to light that
the strenuous effort of the general insurance companies in the study
area would have
potential demand for general insurance business. All the four public
sector general
insurance companies United India, New India Assurance, National
and Oriental
insurance have in total 4 branches and 3 Divisional Offices in Sivkasi
are tapping the
demand for general insurance and create awareness to take general
insurance policies.

50
 Findings as regard to Market Analysis:-
 It is inferred that, the AVERAGE OF FIRE PREMIUM was found to
be high in New India Assurance by Oriental Insurance Company,
followed by United India Insurance Company and National Insurance
Company respectively.
 It has been inferred that the AVERAGE NUMBER OF CLAIMS
FILED during 2015-2017 was found to be high in New India
Assurance Company, followed by National Insurance Company,
Oriental Insurance Company and United India Insurance Company
respectively.
 It has been observed that the AVERAGE NUMBER OF CLAIM
SETTLED over a period was found to be high in New India
Assurance Company, followed by National Insurance Company,
Oriental Insurance Company and United India Insurance Company.
 It has been observed that the total premium was found to be high in
National Insurance Company followed by Oriental Insurance
Company, New India Assurance Company and United India
Insurance Company during the study period.
 It has been inferred that the AVERAGE AMOUNT OF MARINE
PREMIUM was found to be maximum in National Insurance
Company followed by New India Assurance Company, United India
Insurance Company and Oriental Insurance Company during the
study period.
 Majority of 51.25% of policy holders have made their first approach
to the company through agents.
 It is heartening to note that 272 customers are satisfied on response
given by general insurance companies in the study area.
 It is inferred that the industrial customers are more satisfied with
services of the officers than the retail customers.
 The survey made in this regard exposes that 94.69% of respondents
do not move for further insurance company due to dissatisfaction of
the first one.
51
 It is inferred that 52.94% of respondents are of the view that they
have hold policies with the current insurer on sentimental ground
inspite of noted lapses on their service.
 The survey brings to light the fact that 100 policy holders decipher
the policy and understood the ingredients of the policy in the right
perspective.

52
Conclusions:-
The marketing of insurance is more burdensome than the marketing
of other financial services like banking and securities market. This
happens to be so because of lesser exposure of the public to the
insurance sector. The insurance marketer faces several serious
handicaps owing to the complex buying behavior of the prospective
client. It is having greater potential for general insurance products.
Sivakasi 293 general insurance companies should make a lot of
innovative measures in their existing setup to seize not only the
domestic business opportunities but also global business
opportunities.
The study area Sivakasi is with all its industrial and trade
potentialities and also with population to have properties insurable
under general insurance folio. The current number of general
insurance companies both belong to both public sector and private
sector make penetrating marketing endeavour in an intensified nature.
They have achieved increasing business every year. Yet comparing
with the vast untapped potential business, the current marketing
efforts are not commensurate and they have to tune up the marketing
force. Especially they have to bring a mind get to the people making
them to recognize general insurance as a cost to the trade and
industries and also an important expense to the common people in
safeguarding the financial loss caused by damage or destruction to
their properties.

53
 1) Personal profile:
 Name:
 Address:
 Sex:
 Male ( ) Female ( )
 Age [ ]
 Occupation
Self-employed []
House-wife [ ]
Professional [ ]
Student [ ]
Q1. Which insurance you are taking?
______________________________________
Q2. What is the most important factor that matters while taking
insurance?
 Quality [ ]
 Price [ ]
 Service [ ]
Q3. How did you come to know about the insurance comp.
 By friends/family [ ]
 T.V. Ads. [ ]
 Press Ads. [ ]
Q4. Are you satisfied with quality of the insurance?
 Yes [ ]
 No [ ]
Q5. What is more important life insurance policy?
 Feature of the policy [ ]
 Name of the company [ ]
 Cash incentive [ ]
54
Q6. Which according to you is the largest company in the life insurance
industry in private sector?
 Reliance [ ]
 ICIC Pru [ ]
 Tata AIG [ ]
 Others [ ]
Q7. Which insurance you currently taking?
 Reliance [ ]
 LIC [ ]
 Max life [ ]
 Others [ ]
Q8. What you look in life insurance policy?
 Security [ ]
 Liquidity [ ]
 Savings [ ]
 All of the above [ ]
Q9. Do you have a reliance life insurance policy?
 Yes [ ]
 No [ ]
Q10.What is your opinion about insurance policy?
 Outstanding [ ]
 Excellent [ ]
 Good [ ]
 Average [ ]

55
Q11. Do you think the price of policies of insurance companies is
high/low compared to competitors?
 Very good [ ]
 High [ ]
 Average [ ]
Q12. Do the various schemes/promotional activities affect your purchase
plans?
 Yes [ ]
 No [ ]
Q13. The most favorable life insurance scheme of the bank?
 I- life plan [ ]
 Finance [ ]
 Sampoorn Raksha plan [ ]
 Online term plan [ ]
Q14. Thinking of similar insurance offered by other companies, how
would you compare your insurance?
 Better [ ]
 Same [ ]
 Don’t know [ ]

Q15. Suggestion (if any):

56
BIBLIOGRAPHY

BOOKS
 G.C. Beri ,Marketing Research , 5 Edition,2016
Company Limited, New Delhi.
 Philip Kotler, Marketing: the Millennium edition, Prentice
Hall of India Pvt. LTD.
Magazines & Trade Journals
 Business World
 Reliance Life Insurance
– internal magazine
 Pamphlets & Catalogues
 Product Brochures
Internet
www.reliancelife.com
www.investopedia.com
www.irda.org
www.indianfoline.com

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