mba sumer projects (2).doc

comparative analysis of insurance companies, products and consumer behavior A Report Submitted to Delhi Business School, New Delhi

Submitted To.

Submitted By. Director Academics

Name: Saood Alam

Delhi Business School Roll No.. dbs/08-10/S-102 New Delhi Batch. July 2008 Semester. IVth University. PTU

Internal Guide:Dr.Keerti JainDelhi Business School

New Delhi -44

Delhi Business School

B-II/M.C.I.E., Mathura Road , New Delhi

Website: www.dbs.edu.inCONTENTS1. ACKNOWLEDGEMENT

03

2. EXECUTIVE SUMMARY

043. INTRODUCTION TO THE INDUSTRY

05

4. PROJECT TRAINING PROFILE (RECRUITMENT) 4.1. Regulations The Agency law

17

4.2.About IRDA

18 4.3.Principle of Channel Development

24 4.4.Profile of a Financial Advisor

26 5. RESEARCH METHODOLOGY

5.1Title

295.2Objective of the Study

295.3Scope of the Study

305.4Significance of the Industry

305.5Significance of the Research

305.6Sampling Methodology

315.7Limitations

326.DATA AND INTERPRETATION

33

7.CONCLUSION

51

8.BIBLIOGRAPHY

52

9.ANNEXURE

54

ACKNOWLEDGEMENT

Expression of feelings by words makes them less significant when it comes to make statement of gratitude

It gives me pleasure to express my most profound regards and sense of great indebtedness and sincere gratitude to my Company Guide Mr. Mithilesh sinha. I would thank to my project guide Mrs .Keerti Jain for his guidance in preparing this report.

SAOOD ALAMEXECUTIVE SUMMARY

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

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

Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer.Introduction to the IndustryTHE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. Unethical practices adopted by some of the players against the interests of the consumers then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that nationalization has lent the industry fairness, solidity, growth and reach.Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956: The market contained 154 Indian and 16 foreign life insurance companies.General InsuranceThe General Insurance industry in India dates back to the Industrial Revolution and the subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the British brought General Insurance to India, and a similar path was followed in the development of this industry. A number of private companies were in existence for years and years until, in 1971, the Indian Government decided that the public interest would be served by nationalizing the industry, merging all the 107 companies into four companies, depending on the sort of business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras respectively. The General Insurance Corporation (GIC) was set up in 1972 as a holding company, having these four companies as its subsidiaries.Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Major Players in The Insurance Industry In India

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country.

The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).

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

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

Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: -

The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-05). 1. HDFC Standard Life Insurance Company Ltd.

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

3. ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.

4. Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

5.Birla Sun Life Insurance Company Ltd.

Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada.

Tata AIG Life Insurance Company Ltd.

SBI Life Insurance Company Limited

ING Vysya Life Insurance Company Private Limited

Allianz Bajaj Life Insurance Company Ltd.

Metlife India Insurance Company Pvt. Ltd.

AMP SANMAR Assurance Company Ltd.

Dabur CGU Life Insurance Company Pvt. Ltd.General Insurance Companies

1. Royal Sundaram Alliance Insurance Company LimitedThe joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi. 2. Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, and Germany.

3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management.

Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001.

4. Cholamandalam General Insurance Company Ltd.

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo.

Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag.

5. TATA AIG General Insurance Company Ltd.

Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake.

Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines.

6. Reliance General Insurance Company Limited.

7. IFFCO Tokio General Insurance Co. Ltd

8. Export Credit Guarantee Corporation Ltd.

9. HDFC-Chubb General Insurance Co. Ltd.Marketing of Insurance In IndiaInsurance is in a manner of speaking the last frontier in the financial sector to open. It is also a sector, which leads to benefits across the full spectrum, from the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. In an under-insured economy, newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

Marketing Mix Policies

Different companies can choose to position themselves differently and hence the Marketing Mix is different. However, there are certain common characteristics that one can cull out from the possible strategies that companies adopt.

Product:

The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans. The key to success is in providing insurance solutions, not standardized insurance products. The concept of riders/optional benefits has already been a huge innovation brought about by the new players, which has led to customization of products for individual needs. However, companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in.

Place:

Different companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. Many companies like HDFC Standard Life are focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these.

Price: Price is a relevant differentiator only in two segments - pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long-term returns generated are more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good long-term maturity value for customers. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge.

Promotion and Advertising:

The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these.

Process:Cashless settlement: One of the most defining and customer-friendly changes that weve seen in recent years relates to the way claims settlements are made. The advent of the third-party administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless settlement of health and auto insurance claims. TPAs are entities who process claims on behalf of insurers: the IRDA licenses them after it is satisfied that they have the financial strength, the trained manpower, the infrastructure and the skills to undertake this activity. Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for cashless settlement of auto insurance claims.

Lower premiums: The spirit of competition and the broadening of the risk experience of insurance companies have contributed to a fall in premiums over the years. Thats because, other things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the lives of, say, 100 people. Further, a broader base will provide greater efficiencies on costs such as distribution, management and claims. A broad basing of the mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to continue.

Premium payment flexibility: Insurers have imparted certain flexibility to premium payment options in order to address this concern. For instance, one now have the option to pay your premiums upfront, which is then carried forward for the tenure of the policy. The yearly premiums are drawn from the initial corpus. Insurers have also introduced the concept of automatic cover maintenance to protect your policy from lapsing owing to your omission to pay your premium on time. Under this, in the event of your not paying the premium, the insurer dips into your investment account to the extent of the premium. Of course, this comes with an in-built drawback: your investment portion diminishes year on year to the extent of the amount paid to cover your risk.

Physical Evidence:

This can play a significant role for marketing in the Indian scenario. Since Internet users are comparatively lesser than countries such as US, the offline mode will be preferred in India. Although the distribution model is largely agent-based, wherever the customer is in contact with the company, this factor can play a significant role in luring the customer.

People:The most important factor that materializes sales and maintains customer relationships on a long-term basis is this factor. No matter what distribution strategy a company adopts, PROJECT TRAINING PROFILE(RECRUITMENT)

REGULATIONS -THE AGENCY LAW

The basics of the insurance business in India are governed by the agency law, which is part of the Indian contracts act,1872. Further, after the industry got opened up the regulatory authority has been the insurance regulatory and development authority(IRDA).

Agent-the definition

According to the section 182 of the Indian contract act ,1872, an agent is a person employed to do any act for another or to represent another in dealing with a third person.

In the insurance sector the term agent is ordinarily applied to a person engaged by the insurer to procure new business.

Powers of the agent

An agent can act only to the extent of authority may be expressed or implied. An authority is said to be expressed when it is given by words spoken or written. It is implied when it is to be inferred from the circumstances of the case.Life Insurance Agent

The insurance act ,1938 defines an agent as one who is licensed under the act and is paid consideration of his soliciting or procuring insurance business including business relating to continuance, renewal or revival of the policies of insurance.

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITYDuties, Powers and Functions

Section 14 of IRDA act,1999 lays down the duties, powers and functions of IRDA.

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.

Without prejudice to the generality of the provisions contained in sub-section(1),the powers and functions of the authority shall include,

1. Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration;

2. 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; 3. Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;

4. Specifying the code of conduct for surveyors and loss assessors;

5. Promoting efficiency in the conduct of insurance business;

6. Promoting and regulating professional organizations connected with the insurance and re-insurance business;

7. Levying fees and other charges for carrying out the purposes of this act;

8. Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with insurance business;

9. Control and regulations of the rates, advantages, terms and conditions that may be offered by insurer 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).10. 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;

11. Regulating investment of funds by insurance companies;

12. Regulating maintenance of margin of solvency;

13. Adjudication of disputes between insurers and intermediaries or insurance intermediaries;

14. Supervising the functioning of the tariff advisory committee;

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

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

17. Exercising such other powers as may be prescribed;

Essentials for the license

The IRDA has prescribed both qualifications and disqualification for a person to be given a license.

QUALIFICATIONSThe person must :-

Be at least 18 years of age;

Have passed at least 12th standard or more (if he is appointed in a place with population 5000 or more),10th standard otherwise;

Have undergone training for at least 100 hours in life or general insurance business as the case may be from an institution, approved and notified by the authority;

Should have also passed the pre-recruitment examination conducted by the Insurance Institute of India or any other examination body recognized by the authority.

In case of an applicant for the composite insurance agent, he/she should have completed at least 150 hours practical training in life & general insurance business, which may be spread over six to eight weeks.DISQUALIFICATIONS

The factors that would debar a person from obtaining a license are that he/she

Has been found to be of unsound mind by a court of competent jurisdiction Has been found guilty of criminal breach of trust, misappropriation, cheating, forgery or abetment or attempt to commit any such offence.The license once issued can be cancelled whenever the person acquires a disqualification. In the case of companies & firms who want to become agents, the test of qualification & disqualification would be applied to all the directors or partners.

There are two separate forms, one for individuals & another for those other than individuals, in which the applications are to be made. The two forms are numbered by IRDA-Agent VB & are annexed to the regulation. The applications in the respective forms have to be made to the designated person appointed buy the insurer sponsoring the application.

The application for the license should be accomplished by proofs.

Of fee having been remitted to the authority.

Of age

Of having completed the training & passed the prescribed examination.

The fee to be sent to the authority directly is Rs. 250 for new license & for renewals applied for within the prescribed period, viz, at least 30 days before the date of expiry. If the application is made after the date of expiry it would be normally refused. But, if the authority is satisfied that hardship would be caused otherwise, the license may be renewed. Prior to renewal of the license of the license the agent should have completed at least 25 hours practical training in life or general insurance business or at least 50 hours practical training in life & general insurance business in the case of a composite insurance agent.

The Duties & Obligations of the Agent

As per the IRDA guidelines every advisor must be trained & licensed to sell life insurance. The responsibilities & obligations of the advisors have been clearly defined.

Every insurance agent should himself & the insurance company that he represents along with the license particulars.

The advisors should take into the actual needs of the clients before recommending a plan.

All requisite information in respect of the products recommended should be provided with a Sales Illustration & the premium to be paid.

The agent is obligated to disclose the scales of commission likely to be earned by him through sale of the recommended product, should the client wish to know it.

The nature of information required in the application form should be adequately explained along with the requirement for supporting documents.

Once the proposal is submitted, the advisor shall inform the status of decision by insurer promptly.

In case of a claim, the advisor is required to render necessary assistance in complying with the requirements for settlement of claims by the insurer.

He/she should not interfere with any proposal introduced by any other any insurance advisor/agent or force the client to terminate an existing policy taken from him/her & take a new proposal within 3 years.

An advisor cannot induce the client to omit any material information or submit any wrong information in the proposal form.

Further no rebating or offering any inducements in lieu of taking a policy is allowed.

Code of Conduct for the Agent

The licensing of Insurance Agent Regulations, 2000 lays down a code of conduct for the agents which state that the agent shall. Disclose the license to the prospect on demand.

Explain all available options to the prospect.

Disclose the scales of commission, if asked for by the prospect.

Impress upon the prospect need to disclose all information

Inform the insurer about any adverse habits & materials facts of the person to be insured.

Convey to the proper about the acceptance or rejection of the proposal.

Render necessary assistance to policy holders or claimants or beneficiaries in complying with the requirements, asked for by the insurer. Advise policy holders to affect nomination.

Make every attempts to ensure remittance of premiums by the policy holders within the stipulated time by giving notice orally or in written..THE PRINCIPLE OF CHANNEL DEVELOPMENT

The company in its vision out the urge to become the dominant player in the industry. The company believes that a high level of self-motivation & a coherent team work for the organization can only achieve this on the whole. The company stresses great emphasis on its core values which are:

INTEGRITY

CUSTOMER FIRST

BOUNDARY LESS

OWNERSHIPThese are the foundation on which the organization works & the base for the overall business environment of the company. Based on the above mentioned Pillars of the company the management has devised the basic principles for the program as a whole which are as following:Recruit the best

Experts in knowing what exactly their customers wants is well versed in spotting the talents from the pools & recruiting only those who have the intellect, energy, drive & the passion to initiate new beginnings & even a lot of changes if they feel so. The incumbents are treated as winners & the custom hiring principle necessitates the factor of having the right person at the right place with the right work. And definitely no compromises on expertise & competencies.

Personal Responsibility

The company believes that it is the prerogative of the company to create the team that it wants. Therefore it aims at providing the learning & development conduits to employees to enhance the domain of knowledge the important leadership & team skills.

Empowered Teams

Each employee is a stake holder in the organization & its growth. It is the one of the important specialty here that the responsibility comes with a degree of autonomy & accountability. The area of operation & growth is to be decided by the individuals himself. But the communication is across the channels & ranks whereby the targets are sent & the corrective measures & rewards also come to them. The most important factor is the employee participation & empowerment.

Rewards & Recognition

The rewards in the company are directly proportional to the work & targets achieved & gone beyond. You work hard you earn more. The contributions done are recognized in the most objective & transparent manner & on the demonstrated competence level. But yes there is certainly an extra for the people who go beyond then what is expected from them.

Shared Vision & Purpose

The company focuses on having the organizations striving towards a common goal, which is easily done through the effective communication & work channel. Large scale interactive process at the organization & group level helps in getting the employees know of what is expected of them & how has been achieved. This factor encompasses through all the critical intervention by the team members or the mentor of the team. THE PROFILE OF A FINANCIAL ADVISORQualifications

1. Age should be ideally between 25-60 years.2. Minimum education qualification is 10 + 2.3. Good & convincing communication skills.4. Capacity to build an impressive network.5. Engaged in gainful business or corporation.6. Willing to undergo extensive training & development programs7. Pleasing personality.Skills & Competencies

The company is always on a look out for people who have the following skills & competencies that we require in business are:

Actuarial skills. Investment management skills. Core operation skills. Core underwriting skills. Relationship management skills. Project management skills.Leadership & Team skills

A passion for achieving results.

High energy levels & infectious enthusiasm

Open to ideas

Strong team players

High caliber & ability

And above all, unyielding integrity.

JOB PROFILE

As a financial advisor for the company, the role of the individual is no way limited to sell the policies of the company. But the role basically starts from the basics of explaining the life insurance aspects & the potential benefits to the customers. Further he is required to assist them in deciding upon the plan that suits them the best in terms of finance and security provided. Therefore the opportunity provided to the advisor is unlimited in no way and the typical benefits can be mentioned as followings:

There is absolutely no need of a startup capital.

There is the benefit of flexible working hours.

The freedom to work from anywhere & being ones own boss.

The unlimited earning benefits in form of remuneration & incentives.

And the privilege of being a part of a world class sales team.

The role of an advisor is multifaceted in the sense that his work scope is in no way limited. But in a nut shell the expectations from an advisor has been laid down by the management in the following manner under two main headings:

1. Providing continuous financial advise to clients

Identifying prospective clients.

Making appointments

Conducting reviews with the prospective/existing clients.

Closing the sales contracts

Getting more referrals so as to increase the network

Providing pre & post sales services to clients

2. The financial advisor is also required to regularly follow the internal sales & the internal reporting system so as to get the feed back & further leads for the prospective areas of business & improvement.

Research methodologyTitle:

To determine comparative analysis of insurance companies, products and consumer behavior TITLE JUSTIFICATION:

The above title is self explanatory. The study deals mainly with studying the buying pattern in the insurance industry. The various segments of the markets divided in terms of Insurance Needs, Age groups , Satisfaction levels etc will also studied.

OBJECTIVE Objective One To determine reasons behind opting for an insurance.

To provide the company with information of customer's Insurance policy if they have any and reasons for opting for that particular policies.

To know the most preferred policy.

Objective Two To determine customers perception towards private insurance companies and their expectation form private insurance companies.

To determine the feedback on services provided by any other insurance agent.

To study the types of benefits provided by insurance services.

To determine the use of Internet for valuable information and decision-making process. SCOPE OF THE STUDY

A big boom has been witnessed in Insurance Industry in recent times. A large number of new players have entered the market and are vying to gain market share in this rapidly improving market.. The study then goes on to evaluate and analyse the findings so as to present a clear picture of trends in the Insurance sector.SIGNIFICANCE OF THE STUDY SIGNIFICANCE TO THE INDUSTRY :

This is a limited study which takes into consideration the responses of 100 people. This data can be explorated to take in the trends across the industry. The significance for the industry lies in studying these trends that emerge from the study. It is a rapiddly changing and evolving sector. People are only beginning to wake up to its vast possibilities. A study like this can attempt to guide the future of the industry based on current trends.SIGNIFICANE FOR THE RESEARCHER :

To facilitate and provide all the useful informtaion of the studt, the company, the insurance industry and also provide marketing ways, methods of insurance.

RESEARCH DESIGN

NON-PROBABILITY

EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH

The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary & secondary. A well-structured questionnaire was prepared and personal interviews were conducted to collect the customers perception and buying behavior, through this questionnaire.

SAMPLING METHODOLOGYSamplingTechnique:Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done. Thus my sampling came out to be judemental and convinent

Sampling Unit:

The respondants who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, Self Employeds etc.

Sample size: The sample size was restricted to only 100, which comprised of mainly peoples from different regions of New Delhi due to time constraints.

Sampling Area :The area of the research was DELHI & NCR.LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of DELHI & NCR and does not necessarily shows a pattern applicable to all of Country.2. Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

3. In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings. DATA ANALYSIS & INTERPRETATION DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIESTable 1COMPANYS NAMENO.OF RESPONDENTSHARE (%)

L.I.C.7878

HDFC22

ICICI PRUDENTIAL1010

SBI LIFE 77

RELIANCE LIFE INSURANCE33

TOTAL100100

Figure 1

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1 by that percent of respondents.

DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS

Table 2BENEFITSNO.OF RESPONDENTSSHARE (%)

Cover Future Uncertainty5555

Tax Deductions2020

Future Investment2525

TOTAL100100

Figure 2

INTERPRETATION 55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy. Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively DATA PROVIDES FEATURES OF INSURANCE POLICY THAT ATTRACTED RESPONDENTS

Table 3FEATURENO.OF RESPONDENTSSHARE (%)

Money Back Guarantee1515

Larger Risk Coverance3737

Easy Access to Agents77

Low Premium3030

Companys Reputation1111

TOTAL100100

Figure 3

INTERPRETATION

Majority of the respondent (37%) found Larger risk coverance as the most attracted feature of the all.

DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE RESPONDENTS

Table 4POLICY TYPENO. OF RESPONDENTS SHARE (%)

LIFE POLICY7575

NON LIFE POLICY2525

BOTH4545

Figure 4

INTERPRETATION

75% of the respondents have Life Insurance Policy while 45% have both. (The % is calculated out of 80 positive response) DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCETable 5RESPONSENO. OF RESPONDENTSSHARE (%)

A saving tool 8181%

A tax saving device 7474%

A tool to protect your family 100100%

Figure 5

INTERPRETATION

81% of the respondents have perception of Insurance being a saving tool.

And 74% of the respondents have perception of Insurance being a tax saving device.

But 100% of the respondents are with the view that Insurance is a tool to protect your family. DATA SHOWS PEOPLES HAVING INSURANCE

Table 6RESPONSENO. OF RESPONDENTSSHARE (%)

Yes 7070%

No 3030%

Figure 6

INTERPRETATION

Of the sample size of 100 surveyed respondents 70% of the respondents are having Insurance policy.

30% of the respondents are either not having any Insurance policy at present or their policy is already matured.

And at present 100% of the respondents are with the view that Insurance is a tool to protect your family. DATA SHOWS BUYING PROCESS OF THE PEOPLE

Table 7BUYING PROCESS NO. OF RESPONDENTSSHARE (%)

Customer approached Insurance company/Agent 4545%

Company/agent approached customer 5555%

Total 100100%

Figure 7

INTERPRETATION

45% of the respondents approached the Insurance Company / Agent.

Where as, 55% of the respondents were approached by the Company /Agent.

DATA SHOWS REASONS BEHIND FOR INSURANCE


Tax saving 8080%

Saving / Investment 8080.%

Family protection 100100%

Figure 8

INTERPRETATION

80.71% of the Respondents opted for Insurance for tax saving benefits.

80.71% of the Respondents opted for saving / Investments.

But all of them, i.e. 100% of the respondents have opted for insurance for their family protection.

DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY

Table 9RESPONSE NO. OF RESPONDENTSSHARE (%)

Satisfied 6060%

Not satisfied 4040%

Not Responded 00.0%

Total 100100%

Figure 9

INTERPRETATION

60% of the respondents are more or less satisfied with their existing policy.

40% of the respondents are not satisfied with their existing policy.

In this case all of those who have taken a policy have responded.

DATA SHOWS SATISFACTION OF +RESPONDENTS WITH RESPECT TO SERVICE AGENT


Satisfied 4545%

Not satisfied 5555%

Not Responded 00.0%

Total 100100%

Figure 10

INTERPRETATION

45% of the respondents are satisfied with their existing service agent.

55% of the respondents are not satisfied with their existing insurance agent.

All of those who have taken a policy have responded. DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX


Paying tax 100100%

Not paying tax -0%

Total 100100%

Figure 11

INTERPRETATION

Of the sample size of 100 respondents, all the respondents are paying tax DATA SHOWS RESPONDENTS INVESTMENTS FOR TAX SAVING

Table 12INVESTMENTS NO. OF RESPONDENTSSHARE (%)

LIC 5151%

NSC3333%

Bonds 3232%

PPF2525%

PF2121%

EPF 1111%

Figure 12

INTERPRETATION

51% of the respondents save their tax by investing in LIC, which is the highest among all Investment. This shows that most people for getting taxes benefits invest in LIC.

33.25% of the respondents do their tax saving by investing in NSC.

32.25% of the respondents to their tax saving by investing in bonds. DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF INVESTMENT FOR SECURING THEIR FUTURE

Table 13NO. OF RESPONDENTSSHARE (%)

Fixed Assets 75

75%

Bank deposits 1111%

Jewellery 2525%

Securities i.e. bonds, MFs 40.40%

Shares 1010%

Insurance 7070%

Figure 13

INTERPRETATION

75.25% of the respondents as with the view that Fixed Assets is the best form of investment for securing their future.

70.5% of the respondents are with the perception that Insurance is the best form of investment for securing their future, which is one of the highest and this shows that insurance is an important key for securing your future. DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM THEIR INVESTMENT


Saving & Returns 100100%

Security 9090%

Tax benefits 71.71.%

Figure 14

INTERPRETATION

100% of the respondents intent to gain saving and returns from their investment.

90% of the respondents intent to gain security from their investments.

Whereas, 71.75% of the respondents intent to gain tax benefits from their investments. DATA GIVES PEOPLES PERCEPTION ON APPROPRIATE AGE FOR BUYING INSURANCE


After 25 years 2929%

After 35 years 1010%

After 45 years 00%

Anytime 6060%

Figure 15

INTERPRETATION

29% of the respondents are with the view that insurance should be bought after the age of 25 years.

10.5% of the respondents are with the view that insurance should be buyed after the age of 35 years.

Whereas, 60.5% of the respondents are with the view that buying of insurance do not have any thing to do with age i.e. there is no age limitations. It can be purchased any time according to the need.

DATA SHOWS PEOPLE OPINION ABOUT INDIAN INSURANCE COMPANIES


Rigid plans 6767%

Non user friendly 2929%

Unsatisfactory services 2626%

Non Aggressive 3535%

Satisfactory 2424%

Good 1010%

Very good 00%

Figure 16 INTERPRETATION

67% of the respondents have the opinion that Indian Insurance Companies have Rigid plans.

29.5% feel that Indian Insurance companies are Non-user friendly. 26.5% feel that services of Indian Insurance companies are Unsatisfactory.

35.75% of the respondents are with the view that Indian Insurance companies are Non-aggressive.CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some intresting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money.

People in general have been impressioned by the marketing and advertising campaigns of insurance companies. A high penetration of print , radio and Television ad campaigns over the years is beginning to have its impact now.

Another heartning trend was in terms of people viewing insurance as a tax saving and investment instrument as much as a protective one. A very high number of respondants have opted for insurance for such purposes and it shows how insurance companies ahve been successful to attract public money in recent times.

The general satisfaction levels among public with regards to policy and agents still requires improvement. But therein lies the oppurtunity for a relative new comer like HDFC Standard Life Insurance Company Ltd . LIC has never been known for prompt service or customer oriented methods and HDFC Standard Life can build on these factors.BIBLIOGRAPHY1.BOOKS/MAGAZINES REFFERED:

STUDY GUIDE- PRINCILES & PRACTICES OF LIFE/ GENERAL INSURANCE, by AIMA.

Books published by INSURANCE INSTITUTE OF INDIA

LIFE-INSURANCE, by Mc GILL

INSURANCE WATCH.

MONEY OUTLOOK.

2.WEBSITES REFFERED:

WWW.CIFAINSURANCE.COM WWW.MONEYOUTLOOK.COM WWW.INSURANCE.IND.COM WWW.HDFCINURANCE.COM

3.REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY. Dec2005.

BRIEF PROFILE OF LIC, INDIADec 2006.

REPORT: COPING WITH COMPETITIONJan2007

ANNEXURES AND QUESTIONNAIRE

1. ARE YOU EMPLOYED?

YES

NO

If YES, only then proceed

2. DO YOU HAVE ANY INSURANCE POLICY?

YES

NO

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE

NON-LIFE

BOTH

4. WHICH COS INSURANCE POLICY YOU PREFER THE MOST? (RANK THEM)

a) LIC

b) ICICIPRUDENTIAL

c) SBI LIFE INSURANCE

d) ING VYSYA LIFE

e) RELIANCE LIFE INSURANCE

f) TATA AIG LIFE

g) ANY OTHER________( Specify)

5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY? (Please Tick)

a)

Documents

mba sumer projects (2).doc