INTRODUCTION

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INTRODUCTION

Ask anyone what his or her greatest fear is and the answer would come up with almost
universal that is death. More than the fact that we will no longer be able to pursue our passion
and aspiration after we have passed away is the feat that we would no longer be therefore the
people we so dearly cherish. Thankfully, there is life insurance to somewhat guarantee our
love ones some initial from of sustenance in the event of our passing. A life insurance would
ensure that our loved ones would receive some resources that would help cushion the pain of
our loss. The amount depends on some factors, but resources are resources and they would go
along, long way and making sure that the people dearest to us would be well taken cared of
after our eventual death.

What is insurance?

Insurance is one of life's necessities and probably the least-understood financial

product. Insurance reimburses people for covered losses in the event of an unfortunate
occurrence such as an illness, accident, or death. At the same time, it can encourage
prevention and safety measures, provide investment capital, lend money, and help to reduce
anxiety for society at large. As a mechanism against loss of income and a means of
safeguarding assets, many Indians have insurance in one form or another. These coverages
may include public coverage, such as disability insurance, a health care policy from an
employer, or personal insurance to protect property such as homes, computers and cars.
Understanding life insurance becomes easier when one realizes that insurance was a
concept developed to transfer a person's risks to another party, thereby protecting the insured
person in the event of any calamity.
Until something happens, such as a car accident, an illness, or the death of a loved
one, paying for insurance may seem like buying something you'll never use. But even if you
never submit a claim, insurance is an investment in your future, as important as pensions and
personal investments.

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BENEFITS OF LIFE INSURANCE
Depending on its usage, life insurance gives various benefits. They are as follows:

• Income for Family

Life insurance proceeds ensure a source of financial security for your family to meet
its household and living expenses.

• Pay of Debts
On the unfortunate death of the insured, the proceeds from a life insurance policy can
be used to meet outstanding debts such as mortgages, car loans or charge account
balances.

• Provide Educational Funding For Children

The cash value of a whole life insurance policy can be used to help accumulate funds
for the higher education of insured’s children.

• Equalize Inheritance
When an asset such as the family business passes on to family members who are
active in it, life insurance proceeds can be used to provide equal assets to other family
members
Apart from these there are also Investment advantages to the Insurance. While most
investment options make a person’s money work harder, they are no substitutes to life
insurance. That's because when a person takes up a life insurance policy, he enjoy the
twin benefit of risk protection as well as returns on savings.

• Life insurance enables a person to enjoy savings that guarantee full protection against
the risk of death of the insured. These long-term savings are made in an easy and
hassle-free manner because of low and convenient installments (or premiums).
• Life insurance also encourages 'forced thrift'. This means that the insured is made to
pay his/her premiums by saving his/her money, which he/she might not do in the
regular course of life.
• Some life insurance policies often allow insured to take loans against his policy,
should he require money to meet any unforeseen expenditure. What's more, some life
insurance policies also allow saving on taxes.

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BENEFITS OF TAKING POLICY

1. Protection: Saving through life insurance guarantee financial protection against risk of
death of the policyholder. In life insurance, on death, the full assured is payable (with
bonuses whenever applicable) whereas in other saving schemes, only the amount saved (with
interest is payable).

2. Aid to thrift: Life insurance encourages ‘thrift’. Long term saving can be made in a
relatively ‘painless’ manner because of the easy installment facility (premiums can be paid
through monthly, quarterly, half-yearly or yearly installment). The salary saving schemes
properly known as SSS provides a convenient method of paying premium each month
through deduction from one’s salary.

3. Liquidity: loans can be raised on endowment type and whole life policies as per policy
conditions on the sole security of a policy, which has acquired a paid-up value. Besides, a life
insurance is also generally accepted as security for even a commercial loan/housing loan.

4. Tax Relief: Tax relief in income tax is available for amounts paid by way of premium
for life insurance subject to the income tax rules in force. Assesses can avail themselves of
provisions in the law for tax relief. In such cases the assured in affect pays a lower premium
for his insurance than he would have to pay otherwise.

5. Money When You Need It: A suitable insurance plan or a combination of different
plans can be taken to need specific needs that are likely to arise in future, such as children’s
education, start-in-life or marriage provision or even periodical needs for cash over a
predetermined stretch of time. Alternatively, policy money can be so arranged to be made
available at the time of one’s retirement from service to be used for any specific purpose,
such as for the purchase of a house or for other investment.

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HOW DOES INSURANCE FUNCTION?

The function of insurance is to protect a person against losses he can't afford. This is
done by transferring the risks of a person, business, or organization -- the "insured" -- to an
insurance company, or "insurer." The insurer then reimburses the insured for "covered" losses
-- i.e., those losses it pays for under the policy’s term.
As the insurance consumer, one has to pay an amount of money, called a premium, to the
insurer to transfer the risk. The insurer pools all its premiums into a large fund, and when a
policyholder has a loss, the insurer draws funds from the pool to pay for the loss. Life is full
of unexpected events that can create large financial losses. For example, whenever you drive,
it is possible that you may have a costly accident. Risks affect you by causing worry about
potential loss and how to deal with the consequences. Insurance reduces anxiety over a
possible loss and absorbs the financial brunt of its consequences

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EVOLUTION OF INSURANCE

One of the earliest forms of life insurance existed during the Greek and Roman times
when following an individual's death, all surviving members made contributions for the
burial services.
It was only much later, in the 17th century, when a formal form of life insurance was
introduced. This was under the Tontine Annuity System wherein associations of individuals
were formed and a fund was created by equal contributions from each member. This sum was
invested, and at the end of each year, the dividend was distributed among the surviving
members. In all of this, the last remaining survivor received the entire amount of the
principal.
With the passage of time, life insurance has evolved into being an easy and affordable
means of providing financial security for the insured and his/her family, in the event of the
death of the insured or his/her inability to earn due to physical disabilities.

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INSURANCE IN INDIA

The insurance sector in India has come a full circle from being an open competitive
market to nationalization and back to a liberalized market again. Tracing the developments in
the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two
centuries.

A brief history of the Insurance sector

The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta
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: 245 Indian and foreign insurers and provident societies taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

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INSURANCE SECTOR REFORMS
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor Mr.
R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction.
The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector. The reforms were aimed at “creating a more efficient and
competitive financial system suitable for the requirements of the economy keeping in mind
the structural changes currently underway and recognizing that insurance is an important part
of the overall financial system where it was necessary to address the need for similar
reforms…” In 1994, the committee submitted the report and some of the key
recommendations included:

• Structure
o Government stake in the insurance Companies to be brought down to 50%
o Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations
o All the insurance companies should be given greater freedom to operate

• Competition
o Private Companies with a minimum paid up capital of Rs.1bn should be
allowed to enter the industry
o No Company should deal in both Life and General Insurance through a single
entity
o Foreign companies may be allowed to enter the industry in collaboration with
the domestic companies
o Postal Life Insurance should be allowed to operate in the rural market
o Only one State Level Life Insurance Company should be allowed to operate in
each state

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 • Regulatory Body
o The Insurance Act should be changed
o An Insurance Regulatory body should be set up
o Controller of Insurance (Currently a part from the Finance Ministry) should be
made independent

• Investments

o Mandatory Investments of LIC Life Fund in government securities to be

reduced from 75% to 50%
o GIC and its subsidiaries are not to hold more than 5% in any company (There
current holdings to be brought down to this level over a period of time)

• Customer Service

o LIC should pay interest on delays in payments beyond 30 days

o Insurance companies must be encouraged to set up unit linked pension plans
o Computerization of operations and updating of technology to be carried out in
the insurance industry

The committee emphasized that in order to improve the customer services and increase the
coverage of the insurance industry should be opened up to competition. But at the same time,
the committee felt the need to exercise caution as any failure on the part of new players could
ruin the public confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirement of Rs.100 crores. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their performance and enable them to
act as independent companies with economic motives. For this purpose, it had proposed
setting up an independent regulatory body.

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THE INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY (IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in April
2000 has fastidiously stuck to its schedule of framing regulations and registering the private
sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the insurance
sector and in particular the life insurance companies were the launch of the IRDA’s online
service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to sell their
products.

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority
(IRDA, which was constituted by an act of parliament) specify the composition of Authority

The Authority is a ten member team consisting of

(a) a Chairman;
(b) five whole-time members;
(c) four part-time members,

(all appointed by the Government of India)

Duties, Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA..
(1) Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance
business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the
powers and functions of the Authority shall include, -
(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or
cancel such registration;

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 (b) protection of the interests of the policy holders in matters concerning assigning of policy,
nomination by policy holders, insurable interest, settlement of insurance claim, surrender
value of policy and other terms and conditions of contracts of insurance;

(c) specifying requisite qualifications, code of conduct and practical training for intermediary
or insurance intermediaries and agents;

(d) specifying the code of conduct for surveyors and loss assessors;

(e) promoting efficiency in the conduct of insurance business;

(f) promoting and regulating professional organisations connected with the insurance and re-
insurance business;

(g) levying fees and other charges for carrying out the purposes of this Act;

(h) calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries and
other organisations connected with the insurance business;

(i) control and regulation of the rates, advantages, terms and conditions that may be offered
by insurers in respect of general insurance business not so controlled and regulated by the
Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);

(j) Specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance intermediaries;

(k) Regulating investment of funds by insurance companies;

(l) Regulating maintenance of margin of solvency;

(m) Adjudication of disputes between insurers and intermediaries or insurance

intermediaries;

(n) Supervising the functioning of the Tariff Advisory Committee;

(o) Specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organisations referred to in clause (f);

(p) Specifying the percentage of life insurance business and general insurance business to be
undertaken by the insurer in the rural or social sector; and

(q) Exercising such other powers as may be prescribed

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PRESENT SCENARIO
The Government of India liberalized the insurance sector in March 2000 with the passage of
the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry
restrictions for private players and allowing foreign players to enter the market with some
limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity
cap for foreign partners in an insurance company. There is a proposal to increase this limit to
49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in
India and this may also include restructuring and revitalizing of the public sector companies.
In the private sector 22 life insurance and 8 general companies have been registered. A host
of private Insurance companies operating in both life and non-life segments have started
selling their insurance policies since 2001.

Life Insurance Market

The Life Insurance market in India is an underdeveloped market that was only tapped
by the state owned LIC till the entry of private insurers. The penetration of life insurance
products was 19 percent of the total 400 million of the insurable population. The state owned
LIC sold insurance as a tax instrument, not as a product giving protection. Most customers
were under- insured with no flexibility or transparency in the products. With the entry of the
private insurers the rules of the game have changed.

The 12 private insurers in the life insurance market have already grabbed nearly 9
percent of the market in terms of premium income. The new business premium of the 12
private players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state
owned LIC's new premium business has fallen.

Innovative products, smart marketing and aggressive distribution. That's the triple
whammy combination that has enabled fledgling private insurance companies to sign up
Indian customers faster than anyone ever expected. Indians, who have always seen life
insurance as a tax saving device, are now suddenly turning to the private sector and snapping
up the new innovative products on offer.

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 The growing popularity of the private insurers shows in other ways. They are coining
money in new niches that they have introduced. The state owned companies still dominate
segments like endowments and money back policies. But in the annuity or pension products
business, the private insurers have already wrested over 33 percent of the market. And in the
popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of
the customers.

The private insurers also seem to be scoring big in other ways- they are persuading
people to take out bigger policies. For instance, the average size of a life insurance policy
before privatization was around Rs 50,000. That has risen to about Rs 80,000. But the private
insurers are ahead in this game and the average size of their policies is around Rs 1.1 lakh to
Rs 1.2 lakh- way bigger than the industry average.
Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding
the second phase of their expansion plans. No doubt the aggressive stance of private insurers
is already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo
new customers.

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S.No Company Indian Partner Foreign Insurer
1. AEGON Religare Religare Enterprises & AEGON,
Bennett, Coleman & Co. Netherlands
Ltd.
2. Aviva Life Insurance Dabur Group Aviva PLC, UK
3. Bajaj Allianz Bajaj Auto Allianz AG,
Germany
4. Bharti-AXA Bharti Group AXA, SA
5. Birla Sun Life Aditya Birla Group Sun Life, Cananda
6. Canara HSBC Oriental Bank Canara Bank & Oriental HSBC Bank
Of Commerce Life Bank Of Commerce
Insurance
7. DLF Pramerica DLF Ltd. Prudential
International
8. Future Generali Future Group Generali Group,
Italy
9. HDFC Standard Life HDFC Ltd. Standard Life, UK
10. ICICI Prudential ICICI Bank Prudential PLC, UK
11. IDBI Federal IDBI Bank & Federal Bank Ageas Insurance
12. IndiaFirst Life Insurance Bank Of Baroda & Andhra Legal & General,
Bank UK
13. ING Vysya Exide Industries Ltd. ING Insurance Intl.
14. Kotak Mahindra Old Mutual Kotak Mahindra Group Old Mutual, UK
15. Max New York Life Max India Ltd. New York Life Intl.
16. MetLife Jammu & Kashmir Bank MetLife Intl.
Holdings
17. Reliance Life Insurance Reliance Capital Ltd. N/A
18. Sahara India Life Insurance Sahara Group N/A
19. Shriram Life Insurance Shriram Group Sanlam Group, SA
20. Star Union Dai-ichi Life Bank Of India Dai-ichi Insurance
21. Tata AIG Life Insurance Tata Group American Intl.
Group (AIG)

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Re-insurance business
Insurance companies retain only a part of the risk (less than 10 per cent) assumed by them,
which can be safely borne from their own funds. The balance risk is re-insured with other
insurers. In effect, therefore, re-insurance is insurer's insurance. It forms the backbone of the
insurance business. It helps to provide a better spread of risk in the international market,
allows primary insurers to accept risks beyond their capacity, settle accumulated losses
arising from catastrophic events and still maintain their financial stability.

While GIC's subsidiaries look after general insurance, GIC itself has been the major
reinsurer. Currently, all insurance companies have to give 20 per cent of their reinsurance
business to GIC. The aim is to ensure that GIC's role as the national reinsurer remains
unhindered. However, GIC reinsures the amount further with international companies such as
Swissre (Switzerland), Munichre (Germany), and Royale (UK). Reinsurance premiums have
seen an exorbitant increase in recent years, following the rise in threat perceptions globally.

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INSURANCE DISTRIBUTION CHANNELS IN LIFE
Distribution channel is the life blood of insurance business. Insurance distribution is strewn
with opportunities and challenges .To make most of the opportunities in growing market like
India we have to overcome challenges while encashing opportunities.
Traditional distribution channel of agency still rules the roost in life insurance in India.
Alternate
distribution channels which came up after the opening up of the sector six years back have
huge potential which needs to be tapped. The graph below is indicative of the influence of
alternative channel in life insurance distribution.
Figure 1: Comparison between Business done through agency and alternate distribution
channel in life insurance industry in India in 2005-06

Why there is need for alternate distribution channels?

To increase insurance penetration in the country.
To differentiate on basis of customer service. To retain and attract new customers so
as to expand business
To increase insurance awareness and knowledge among people.
To satisfy the needs of more demanding customers.
To improve cost efficiency in insurance distribution
What determines choice of distribution channel for an insurance company?
Where are the customers?
What is target customer profile?

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 Which product (linked, traditional, term etc.) can be sold through distribution channel?
Which channel provides best buying experience and value to target customer segment?
The customer preferences vary by market segment like geography, age, income, life style
etc, and market characteristics change over time.

BROKERS

The broker acts as an intermediary between the companies and insurers and represents
insurance buyer. Insurance brokers differ from agents who represent the insurance carrier and
not the client. There are three types of licensing for brokers-Direct (life and non-life and
excluding reinsurance), Composite (direct and reinsurance) and Reinsurance.
This channel is new experience for the life insurance customer accustomed to brokers in
other financial services, real estate, and travel and tourism. Internationally, insurance brokers
focus on corporate and non-life insurance business, leaving the retail and life business to
agents. However, brokers in India had to cater to both the retail and life business, because of
virtual stagnation in the non-life sector prior to detariffing .Brokers account for about
15 per cent of non-life premium at present.
Percentage of new business written by brokers in life insurance for the year 2005-06 is just
31% which is indicative of the minimal presence of this channel in life insurance distribution.
Major drawback in Indian insurance broking is low channel awareness and unevenly spread
of broking activity. Majority of brokers are based in western zone (around 78) and northern
zone ( around 79). There is no licensed broker representation hailing from states of Goa,
Madhya Pradesh, Jammu and Kashmir, Haryana, Uttaranchal, Bihar, Jharkhand etc.
Reasons for this are as follows:-
l Large amount of minimum paid up capital.
l Lack of entrepreneurship of locals.
l Inadequate availability of insurance potential.
l Proximity of metros to few states.
l Co-broker and sub-broker arrangement are not allowed.
l Building faith in mind of client and building personal credibility.
Insurance brokers are demanding a cut in the minimum capital requirement for getting license
and permission to have co-brokers and sub-brokers.
The IRDA had set up an expert committee in July 06 to address brokers related issues, has
been receiving representation from Insurance Brokers Association of India(IBAI) but no
aspect of Life insurance was touched upon by this expert committee report.

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OBJECTIVES

The main objective of doing this project is to study policyholder’s satisfaction level. During
this student internship program period I have to achieve something which is helpful to the
development of myself and some value addition to the company. To find out how satisfied
policyholders are, this will be useful both for the company as well as insurer.
• The main objective of this study is to find out the satisfaction level of policyholders.
• To check weather policyholders know what they buy.
• To find out whether insurance is sold to or is bought by the customer.

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SCOPE
This study aims at finding the satisfaction level of customers. The study is entirely
based on the existing customers of SMC Insurance Brokers and hence can be used by
SMC and insurers whose policies are sold by them. This study also aims at finding
weather the policies are sold to or is bought by them. Weather their needs from the
policy are fulfilled or not.

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LITERATURE REVIEW

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SMC GLOBAL
SMC Group, founded in 1990, is India’s leading share and stock broker, provides a wide
range of financial services and investment solutions. A blend of extensive experience, diverse
talent and client focus has made us the 4th largest broking house in India(Source: Dun and
Bradstreet, 2008).

Over the years, SMC has expanded its operations domestically as well as internationally.
Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin,
Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread
across 425 cities/towns in India.

We offer a diverse range share and stock broker services which includes institutional and
retail brokerage of equity, currency, commodities, derivatives, online trading, depository
services, fixed Deposits, IPOs and mutual funds distribution, dedicated desk for NRI and
institutional clients, insurance broking, clearing services, margin funding, investment
banking, portfolio management, wealth advisory & research. We have a highly efficient
workforce of over 6000 employees and over 7500 financial advisors serving the financial
needs of more than 5,75,000 satisfied investors.

We are also amongst the first financial firms in India to expand operations in the lucrative
gulf market, by acquiring license for broking and clearing member with Dubai Gold and
Commodities exchange (DGCX).

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CORE VALUES

22
VISION
To be a global major in providing complete investment solutions, with relentless focus on
Investor care, through superior efficiency and complete transparency.

PRODUCTS & SERVICES

• Equity , Derivatives and Commodities Trading.

• Commodities Trading in International Markets through DGCX

• Online Internet Trading.

• Online Commodity Trading.

• Online IPO and Mutual Fund.

• Depository Services for both Shares and Commodities (ISO 9001:2000).

• IPO and Mutual Fund Distribution.

• Clearing Services in NSE F&O, BSE F&O and DGCX.

• Dedicated NRI & Institutional Desk.

• Investment Banking Services.

• Insurance Broking Services for Life and Non-Life products.

• Wealth Advisory Services

• Research support to the clients through Intraday SMS and E-mails.

• Investment and Arbitrage Advisory Services for HNIs and Corporates.

• Weekly Magazine WISE MONEY on Equity, Derivatives, Commodities, IPOs and

• Mutual Funds.

• Investor Education Programs through Regular Seminars & Conferences.

• Web based Accounting.

MEMBERSHIPS REGISTRATIONS

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 • Member of NSE, BSE, F&O, NCDEX, MCX & DGCX
• Clearing Member in NSE F&O, BSE F&O and DGCX
• Depository Participant for both shares & Commodities
• Category 1 SEBI approved Merchant Banker
• Insurance Broker (Life & Non-Life)
• Distributors of IPO’s, Mutual Funds and various other 3rd party products

FACTS & FIGURES

• Commanding the faith of over 4,50,000 satisfied investors

• More than 4400 trading terminals of NSE, BSE, F&O, NCDEX and MCX installed

• Highly dedicated workforce of 1800+ employees, 6000+ financial advisors in SMC

• Network

• Trading Valume crossed of $175 billion in the first 9 months of FY 2007-2008 as

• against $105 billion in the FY 2006-2007 (full year)

• Strong presence in the business with a rich experience of over 20 years

• Commanding more than 3% of the total market share in the Indian equities and
• derivatives market, over 4% in the Indian commodities market and more than 10% in
• Dubai gold and commodities exchange

• Handling more than 2,50,000 trades per day

• Taking care of over 1,50,000 DP clients

• Dedicated arbitrage wing of more than 300 arbitragers, doing risk-free arbitrage
• between capital market & futures in both equity and commodity markets

• Equipped with hi-tech in-house Research wing and technological resources providing
• complete research solution

• Fast, Transparent and easy to use Online Internet Trading Platform .Special advisory
• services to HNIs and Corporates

• Clearing member to 68 trading members in NSE F&O, BSE F&O and DGCX i.e. 28
in
• NSE, 38 in BSE and 2 in DGCX

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ACHIEVEMENT
“AN ACHIEVEMENT IS BONDAGE. IT OBLIGES ONE TO A HIGHER
ACHIEVEMENT"

• ISO 9001:2000 certified DP for both shares and commodities

• 4th largest broking house of India in terms of trading terminals (Source: Dun and
• Bradstreet, 2008

• 5th largest sub-broker network in the country (Source: Dun and Bradstreet, 2007)

• 5th largest distributors of IPO in Retail. (Source: Prime Data Rankings)

• Awarded the Fastest Growing Retail Distribution Network (Source: Business Sphere,
• 2008)

• Nominated among the top 3, in the CNBC Optimix Financial Services Award 2008
• under the "National Level Retail Category".

• One of the first financial firms in India to expand operations in the lucrative gulf
• market, by acquiring valuable license for trading and clearing with Dubai gold and
• commodities exchange (DGCX)

• Amongst a Elite group of brokers having proprietary desk for doing risk-free arbitrage
• in commodities

• First trade on DGCX for silver and First currency trade for rupee-dollar

• Awarded the Major Volume Driver by BSE for the Third year in a row i.e. 2006-07,
• 2005-06 and 2004-05 (Awarded to top 10 Brokers)

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SMC INSURANCE BROKERS PVT LTD
SMC offers risk management services and a complete range of insurance solutions through
its subsidiary company SMC Insurance Brokers Pvt. Ltd. The company holds a Direct
Insurance Broker's license from Insurance Regulatory and Development Authority (IRDA)
and provides a wide array of Life Insurance and General Insurance products under
professional guidance of experts in the field. SMC provides customized solutions to
individual clients, small and medium enterprises as well as to the leading corporate houses
and institutions across the country. Our philosophy We believe that "a transaction is for a
moment but a relationship is forever". Hence we give all transactions equal importance
and strive to offer our esteemed clientele an unmatched service. Our edge

• Pan India presence with own branches in over 48 locations and 2000+ offices of
group companies

• 3000+ strong team of employees

• 1,00,000+ customers

• 1500+ man years of General Insurance experience

• Robust IT Infrastructure with over 1 lac Sq. ft. office space

• Widest possible product range

• A team of passionate professionals with strong Domain knowledge and expertise

• Flexibility to choose product of any insurance company

• Quality of services

• Customized solutions

• Value addition for our customers

• Comprehensive Risk Portfolio Management including identification, measurement,

assessment and handling of the risk, of which insurance is an integral part.

• Designing of customized and qualitative insurance programme

• Offer of choices while recommending suitable insurance policies

• Assistance in deciding sum insured to avoid under-insurance

• Due to our volume of business, knowledge of market and expertise, we are able to
obtain the best possible premium rates.

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• Selection of Policy wording and clauses where choice is available

• Assistance in processing of claims to obtain fair and prompt settlement from

Insurance Companies

• Extensive rapport and liaison with insurance companies

• Outsourcing of major part of insurance function

27
RESEARCH METHODOLOGY

28
RESEARCH METHODOLOGY
The Research and Methodology adopted for the present study has been systematic and
was done in accordance to the objectives set which has been detailed as below.

Research Definition
Research is a process in which the researcher wishers to find out the end result for a
given problem and thus the solution helps in future course of action.
According to Redman & Mory research is defined as a “Systemized effort to gain
new knowledge”.

Research Design:
According to “Claire Seltiz”, a research design is the arrangement of condition and
analysis of data in manner that aims to combine relevance to the research purpose with
economy in procedure.

NATURE OF RESEARCH
Research is basically of two types.
1. Descriptive research
2. Explorative research

Descriptive Research: These studies are concerned with describing the characteristic of a
particular individual or a group.

SAMPLE SIZE
Total sample size is 50

SAMPLING UNIT: -
The sample Unit taken by me; existing customers SMC Insurance Brokers

SAMPLING AREA:-
I have covered some of the existing policyholders from the residential area of Faridabad

29
DETERMINING SOURCES OF DATA
There are two main sources of data
1. Primary data
2. Secondary data

Primary Data: It consists of original information collected for specific research. Primary data for
this research study was collected through a direct survey to obtain this primary data a well structured
questionnaire was prepared by the researcher.

Secondary Data: It consists of information that already exists somewhere and has been
collected for some specific purpose in the study. The secondary data for this study is collected from
various Japanese Management books.

QUESTIONNAIRE

Questionnaire: A set of questions containing a few Technical questions and more number
of opinionated questions are prepared for the policyholders
Questionnaire Development:
Questionnaire is the most common instrument in collecting primary data. In order to gather
primary data from viewers.The present questionnaire consists of following type of questions.
 Open ended questions
 Closed ended questions
 Dichotomous questions
 Multiple choice questions
 Ranking question.

Open ended questions: It has no fixed alternatives to which the answer must conform.
Thus, respondent answer in his/her own words at any length they choose.

30
Closed ended questions: Closed ended questions have no other options other than
selecting the one that close matches the respondent’s opinion or attitude.

Dichotomous questions: A dichotomous questions refers to one, which offers the

respondents a choice between only two alternatives.

SIGNIFICANCE OF THE STUDY

i. Significance to the Industry
The analysis and conclusions drawn by me during the course of my study can serve as a guide to the
industry people since a systematic analysis of facts has been attempted by me.

ii. Significance for the Researcher

No professional curriculum is considered complete without work experience. It is well evident that
work experience is an indispensable part of every professional course. In the same manner practical
work in any organization is must for each an every individual, who is undergoing management
course. Without the practical exposure one cannot consider himself as a qualified capable manager.
Entering in the organization is like stepping into altogether a new world.

LIMITATIONS
i. The geographical area was very much limited to residential area & so the results are not
particularly reflection of the current behavior.
ii. Biases and non-cooperation of the respondents.
iii. Due to limited time period and constrained working hours for most of the respondents, the
answers at times were vague enough to be ignored.
iv. People are not interested in giving personal opinion.
v. Most of the people in India take their policies in the period preceding March(for tax saving
purposes) & so the response to initial contacts were not all encouraging and that has been the
primary reason in the inability to quantify the results large enough so as to deduce any
relevant outcomes.

31
DATA ANALYSIS &
INTERPRETATION

32
(1) What percentage of your income are you willing to spend on life insurance?
a) 0-20%
b) 20%-40%
c) 40%-60%
d) 60%-80%

0-20% 25

20%-40% 15

40%-60% 8

60%-80% 2

total 50

percentageof income

0-20%
20%-40%
40%-60%
60%-80%

From the above graph it is visible that half of the population surveyed is not investing more
than 20%

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(2) Out of the following you have the insurance policy of:
a) Tata Aig
b) Kotak Mahindra
c) ICICI Pru
d) Birla sunlife

Tata Aig 10

Kotak Mahindra 17

ICICI Pru 9

Birla sunlife 14

total 50

Insurancepolicyof

tata aig
kotak mahindra
ICICI Pru
Birlasunlife

From the above graph it is visible that kotak Mahindra life insurance is most popular among
policyholders followed by Birlasunlife insurance

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(3) Which type of scheme do you have?
a) Protection
b) Savings & investment
c) Retirement
d) Child

Protection 5

Savings & Investment 27

Retirement 2

Child 16

total 50

Typeof scheme

Protection
Savings & investment
Retirement
Child

From the above graph it is visible as a category savings & investment products are most
popular.

35
(4) How would you rate the product?
a)Excellent
b) Good
c) Average
d) Poor

Excellent 7

Good 22

Average 15

Poor 6

Total 50

Rateyour product

Excellent
Good
Average
Poor

From the above graph it is visible that less than 50% of the policy holders are satisfied

36
(5) Express your opinion about premium of the product?
a) Very high
b) High
c) Moderate
d) Low

Very high 6

High 17

Moderate 25

Low 2

total 50

Opinionabout premium

Veryhigh
High
Moderate
Low

From the above graph it is visible that only 50% consider their policy premium to be moderatr

37
(6) At any point of time have you surrender your policy?
a) Yes
b) No

Yes 41

No 9

total 50

From the above graph it is visible that 82% of the people surrendered their policy once or more.

38
(7) Do you think insurance is better than other savings and investment products?
a) Yes
b) No

Yes 17

No 33

total 50

From the above graph it is visible that 66% don’t consider insurance better than other investment
products

39
(8) How would you rate the services of SMC Insurance Brokers Pvt ltd?
a) 1
b) 2
c) 3
d) 4
e) 5

1 3

2 10

3 17

4 13

5 7

Total 50

Ratetheservicesof SMC insurancebrokers

pvt ltd

1
2
3
4
5

From the above graph it is visible that 74% of have rated SMC Insurance average
or better than average

40
 FINDINGS & CONCLUSION

41
FINDINGS
• Half of the population surveyed is not investing more than 20%
• Kotak Mahindra life insurance is most popular among policyholders followed by
Birlasunlife insurance
• Category savings & investment products are most popular.
• Less than 50% of the policy holders are satisfied
• Only 50% consider their policy premium to be moderate
• 82% of the people have surrendered their policy once or more.
• 66% don’t consider insurance better than other investment products
• 74% of have rated SMC Insurance average or better than average

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CONCLUSION

In a business that is majorly driven by satisfaction of customers it is very important to give

the customer right product so that he remains with you and not move out to others. Future is
uncertain with intense competition in the market and only satisfied customers will make you
win over the competition. SMC Insurance has on understanding needs of customers and this
gives it an edge. In addition a major segment of the Indian population has low disposable
income, meaning that every penny won will be obtained after a lot of persuasion and the
expected value for money is high.

The category most popular among the customer is saving and investment which needs to be
continuously followed to how the funds are performing. The major drawback is the surrender
rate , 81% of them have already once or more than once surrendered their policy which is of
great loss to the consumer and is a matter of grave concern. Insurance is bought by the
customer which is good as it leads to less chances of misselling.

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RECOMMENDATIONS

 Create awareness: The Company has to take care of awareness creation about the
products and services among the customers

 Need : The company should first understand the need of customers .

 The company has to give periodic training.

 Product promotion strategies should be improved.

 Company should consider the present competition and should act according to the
customer needs.

 Focus on ways to identify right products for customers

 Follow the performance of the products.

 Poor performing product should not be recommended.

 Database for customer and product should be there.

44
 BIBLIOGRAPHY

1) Kothari, C.R. Research Methodology, 3rd edition, 1997, Vikas Publishing House Pvt.
Ltd, New Delhi
2) Beri, GC Marketing research, 4th edition Tata McGraw-Hill publishing company, New
Delhi
3) www.SMCIndiaonline.com
4) www.Irda.gov.in
5) www.Wikipedia.org
.

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 APPENDICES

QUESTIONNAIRE
Please answer the following questions:
Name

46
Age
Occupation
Income
(1)What percentage of your income are you willing to spend on life insurance?
a)0-20%
b) 20%-40%
C)40%-60%
d)60%-80%
(2) Out of the following you have the insurance policy of:
a) Tata Aig
b) Kotak Mahindra
c) ICICI Pru
d) Birla sunlife
(3) Which type of scheme do you have?
a) Protection
b) Savings & investment
c) Retirement
d) Child
(4) How would you rate the product?
a)Excellent
b) Good
c) Average
d) Poor
(5) Express your opinion about premium of the product?
a) Very high
b) High
c) Moderate
d) Low
(6) At any point of time have you surrender your policy?
a) Yes
b) No
(7) Do you think insurance is better than other savings and investment products?
a) Yes
b) No
(8) How would you rate the services of SMC Insurance Brokers Pvt ltd?
a) 1
b) 2
c) 3
d) 4
e) 5

47
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