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Project Report OnRELIANCE LIFE INSURANCE COMPANYLIMITEDSUBMMITED FORPartial fulfillment of the requirements of two years full timeMaster of Business Management (MBA)Projects Thesis Dissertation ndash projectsparadisecom 2
CONTENTSPreface--------------------------------------------------- (3)Certificate------------------------------------------------ (4)Acknowledgement-------------------------------------- (5)Executive Summary------------------------------------- (6)Index----------------------------------------------------- (7)Projects Thesis Dissertation ndash projectsparadisecom 3
EXECUTIVE SUMMARYAnil Dhirubhai Ambani Group (ADAG) announces the acquisition of 100percent shareholding in AMP Sanmar Life Insurance Company LimitedReliance Life Insurance Company Limited is officially launched onFebruary 1 2006 This was after obtaining the required regulatiry approvalsfrom the Registrar of Companies and the Insurance Regulatory andDevelopment Authority Reliance Life Insurance is the part of the RelianceCapitalReliance Life Insurance has plenty of plans on the anvil It has also 118branches with strong presence in South and a bouquet of products cateringsavings protection and investment need of individuals and corporate The
head-office of it is at ChennaiThe company has already added 600 employees in addition to the 1000 plusstaff of the erstwhile AMP Sanmar Life Insurance Company LimitedReliance Life Insurance aims to be the consumerrsquos preferred life insurer byunderstanding and meeting his needsThink Bigger Think BetterINDEXProjects Thesis Dissertation ndash projectsparadisecom 4CHAPTERNOSUBJECT PAGENO1 INSURANCE INDUSTRY11 Meaning of Insurance12 Importance of Insurance13 Difference between Insurance and Assurance14 Principles of Insurance15 History of Insurance16 Time line in Insurance history17 Meaning of Life Insurance18 History of Life Insurance19 Key features of Life Insurance110 Benefits of Life Insurance111 Role of Life Insurance in the growth of economy10111213151719202427282 INTRODUCTION TO THE COMPANY
21 About Reliance Life Insurance22 History23 Journey so far24 Role of IT at Reliance Life Insurance25 Mission26 Core Values27 Future Plans28 Head ndash Office29 Branches3032323336363737383 PRODUCT MIX31 Traditional Plans32 Unit linked Plans40484 HUMAN RESOURCE MANAGEMENT41 Recruitment42 Selection43 Training and Development44 Career Development45 Communication46 Incentives47 Services48 Performance Appraisal49 Organizational form and Structure410 Department5353565657
5959606161Projects Thesis Dissertation ndash projectsparadisecom 55 MARKETING DEPARTMENT51 Distribution Channel52 Promotional Programmes and Target segment53 Comparative Study6366716 RESEARCH METHODOLOGY61 Objective of the study62 Questionnaire63 Sampling Method and Sampling Size64 Limitations65 Analysis of Questionnaire66 SWOT Analysis7979808283967 FINANCE DEPARTMENT 998 CONLUSION 1069 BIBLIOGRAPHY AND REFRENCES 10810 APPENDIX 110Projects Thesis Dissertation ndash projectsparadisecom 6
CHAPTER-1INSURANCE INDUSTRY11MEANING OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 7Insurance may be described as a social device to reduce or eliminate risk ofloss to life and property Insurance is a collective bearing of risk Insurance
is a financial device to spread the risks and losses of few people among alarge number of people as people prefer small fixed liability instead of biguncertain and changing liabilityInsurance can be defined as a ldquolegal contract between two parties wherebyone party called insurer undertakes to pay a fixed amount of money on thehappening of a particular event which may be certain or uncertainrdquo Theother party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possiblelosses on account of risks and perils It provides financial compensation forthe losses suffered due to the happening of any unforeseen events12 IMPORTANCE OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 8Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financialintermediary Today insurance industry is one of the most growing sectors inIndia There is lot of potential in the Indian Insurance IndustryThere are many issues which require study The scope of the study ofinsurance industry of India would be very great as there are ongoingdevelopments in the industry after the opening of the sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow
by foreign partnersAnother major issue is the effects on LIC after the entry of private players inthe market Though market share of LIC has been affected it has improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new productranges insurance brokersrsquo regulation incentive scheme of developmentofficers of LIC etc So it offers lot of scope for studying the insuranceindustryRight now the insurance industry has great opportunities in a country likeIndia or China which huge population Also the penetration of insurance inProjects Thesis Dissertation ndash projectsparadisecom 9India is very low in both life and non-life segment so there is lot potential tobe tappedBefore starting the discussion on insurance industry and related issues wehave to start with the basics of insurance So first we understand what isinsurance How the word lsquoinsurancersquo is different from the wordlsquoassurancersquo etc13 DIFFERENCE BEETWEN INSURANCEAND ASSURANCEAssurance is older in history and it was used to describe all types ofinsurances From 1826 the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine fire etc
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
head-office of it is at ChennaiThe company has already added 600 employees in addition to the 1000 plusstaff of the erstwhile AMP Sanmar Life Insurance Company LimitedReliance Life Insurance aims to be the consumerrsquos preferred life insurer byunderstanding and meeting his needsThink Bigger Think BetterINDEXProjects Thesis Dissertation ndash projectsparadisecom 4CHAPTERNOSUBJECT PAGENO1 INSURANCE INDUSTRY11 Meaning of Insurance12 Importance of Insurance13 Difference between Insurance and Assurance14 Principles of Insurance15 History of Insurance16 Time line in Insurance history17 Meaning of Life Insurance18 History of Life Insurance19 Key features of Life Insurance110 Benefits of Life Insurance111 Role of Life Insurance in the growth of economy10111213151719202427282 INTRODUCTION TO THE COMPANY
21 About Reliance Life Insurance22 History23 Journey so far24 Role of IT at Reliance Life Insurance25 Mission26 Core Values27 Future Plans28 Head ndash Office29 Branches3032323336363737383 PRODUCT MIX31 Traditional Plans32 Unit linked Plans40484 HUMAN RESOURCE MANAGEMENT41 Recruitment42 Selection43 Training and Development44 Career Development45 Communication46 Incentives47 Services48 Performance Appraisal49 Organizational form and Structure410 Department5353565657
5959606161Projects Thesis Dissertation ndash projectsparadisecom 55 MARKETING DEPARTMENT51 Distribution Channel52 Promotional Programmes and Target segment53 Comparative Study6366716 RESEARCH METHODOLOGY61 Objective of the study62 Questionnaire63 Sampling Method and Sampling Size64 Limitations65 Analysis of Questionnaire66 SWOT Analysis7979808283967 FINANCE DEPARTMENT 998 CONLUSION 1069 BIBLIOGRAPHY AND REFRENCES 10810 APPENDIX 110Projects Thesis Dissertation ndash projectsparadisecom 6
CHAPTER-1INSURANCE INDUSTRY11MEANING OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 7Insurance may be described as a social device to reduce or eliminate risk ofloss to life and property Insurance is a collective bearing of risk Insurance
is a financial device to spread the risks and losses of few people among alarge number of people as people prefer small fixed liability instead of biguncertain and changing liabilityInsurance can be defined as a ldquolegal contract between two parties wherebyone party called insurer undertakes to pay a fixed amount of money on thehappening of a particular event which may be certain or uncertainrdquo Theother party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possiblelosses on account of risks and perils It provides financial compensation forthe losses suffered due to the happening of any unforeseen events12 IMPORTANCE OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 8Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financialintermediary Today insurance industry is one of the most growing sectors inIndia There is lot of potential in the Indian Insurance IndustryThere are many issues which require study The scope of the study ofinsurance industry of India would be very great as there are ongoingdevelopments in the industry after the opening of the sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow
by foreign partnersAnother major issue is the effects on LIC after the entry of private players inthe market Though market share of LIC has been affected it has improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new productranges insurance brokersrsquo regulation incentive scheme of developmentofficers of LIC etc So it offers lot of scope for studying the insuranceindustryRight now the insurance industry has great opportunities in a country likeIndia or China which huge population Also the penetration of insurance inProjects Thesis Dissertation ndash projectsparadisecom 9India is very low in both life and non-life segment so there is lot potential tobe tappedBefore starting the discussion on insurance industry and related issues wehave to start with the basics of insurance So first we understand what isinsurance How the word lsquoinsurancersquo is different from the wordlsquoassurancersquo etc13 DIFFERENCE BEETWEN INSURANCEAND ASSURANCEAssurance is older in history and it was used to describe all types ofinsurances From 1826 the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine fire etc
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
21 About Reliance Life Insurance22 History23 Journey so far24 Role of IT at Reliance Life Insurance25 Mission26 Core Values27 Future Plans28 Head ndash Office29 Branches3032323336363737383 PRODUCT MIX31 Traditional Plans32 Unit linked Plans40484 HUMAN RESOURCE MANAGEMENT41 Recruitment42 Selection43 Training and Development44 Career Development45 Communication46 Incentives47 Services48 Performance Appraisal49 Organizational form and Structure410 Department5353565657
5959606161Projects Thesis Dissertation ndash projectsparadisecom 55 MARKETING DEPARTMENT51 Distribution Channel52 Promotional Programmes and Target segment53 Comparative Study6366716 RESEARCH METHODOLOGY61 Objective of the study62 Questionnaire63 Sampling Method and Sampling Size64 Limitations65 Analysis of Questionnaire66 SWOT Analysis7979808283967 FINANCE DEPARTMENT 998 CONLUSION 1069 BIBLIOGRAPHY AND REFRENCES 10810 APPENDIX 110Projects Thesis Dissertation ndash projectsparadisecom 6
CHAPTER-1INSURANCE INDUSTRY11MEANING OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 7Insurance may be described as a social device to reduce or eliminate risk ofloss to life and property Insurance is a collective bearing of risk Insurance
is a financial device to spread the risks and losses of few people among alarge number of people as people prefer small fixed liability instead of biguncertain and changing liabilityInsurance can be defined as a ldquolegal contract between two parties wherebyone party called insurer undertakes to pay a fixed amount of money on thehappening of a particular event which may be certain or uncertainrdquo Theother party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possiblelosses on account of risks and perils It provides financial compensation forthe losses suffered due to the happening of any unforeseen events12 IMPORTANCE OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 8Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financialintermediary Today insurance industry is one of the most growing sectors inIndia There is lot of potential in the Indian Insurance IndustryThere are many issues which require study The scope of the study ofinsurance industry of India would be very great as there are ongoingdevelopments in the industry after the opening of the sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow
by foreign partnersAnother major issue is the effects on LIC after the entry of private players inthe market Though market share of LIC has been affected it has improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new productranges insurance brokersrsquo regulation incentive scheme of developmentofficers of LIC etc So it offers lot of scope for studying the insuranceindustryRight now the insurance industry has great opportunities in a country likeIndia or China which huge population Also the penetration of insurance inProjects Thesis Dissertation ndash projectsparadisecom 9India is very low in both life and non-life segment so there is lot potential tobe tappedBefore starting the discussion on insurance industry and related issues wehave to start with the basics of insurance So first we understand what isinsurance How the word lsquoinsurancersquo is different from the wordlsquoassurancersquo etc13 DIFFERENCE BEETWEN INSURANCEAND ASSURANCEAssurance is older in history and it was used to describe all types ofinsurances From 1826 the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine fire etc
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
5959606161Projects Thesis Dissertation ndash projectsparadisecom 55 MARKETING DEPARTMENT51 Distribution Channel52 Promotional Programmes and Target segment53 Comparative Study6366716 RESEARCH METHODOLOGY61 Objective of the study62 Questionnaire63 Sampling Method and Sampling Size64 Limitations65 Analysis of Questionnaire66 SWOT Analysis7979808283967 FINANCE DEPARTMENT 998 CONLUSION 1069 BIBLIOGRAPHY AND REFRENCES 10810 APPENDIX 110Projects Thesis Dissertation ndash projectsparadisecom 6
CHAPTER-1INSURANCE INDUSTRY11MEANING OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 7Insurance may be described as a social device to reduce or eliminate risk ofloss to life and property Insurance is a collective bearing of risk Insurance
is a financial device to spread the risks and losses of few people among alarge number of people as people prefer small fixed liability instead of biguncertain and changing liabilityInsurance can be defined as a ldquolegal contract between two parties wherebyone party called insurer undertakes to pay a fixed amount of money on thehappening of a particular event which may be certain or uncertainrdquo Theother party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possiblelosses on account of risks and perils It provides financial compensation forthe losses suffered due to the happening of any unforeseen events12 IMPORTANCE OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 8Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financialintermediary Today insurance industry is one of the most growing sectors inIndia There is lot of potential in the Indian Insurance IndustryThere are many issues which require study The scope of the study ofinsurance industry of India would be very great as there are ongoingdevelopments in the industry after the opening of the sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow
by foreign partnersAnother major issue is the effects on LIC after the entry of private players inthe market Though market share of LIC has been affected it has improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new productranges insurance brokersrsquo regulation incentive scheme of developmentofficers of LIC etc So it offers lot of scope for studying the insuranceindustryRight now the insurance industry has great opportunities in a country likeIndia or China which huge population Also the penetration of insurance inProjects Thesis Dissertation ndash projectsparadisecom 9India is very low in both life and non-life segment so there is lot potential tobe tappedBefore starting the discussion on insurance industry and related issues wehave to start with the basics of insurance So first we understand what isinsurance How the word lsquoinsurancersquo is different from the wordlsquoassurancersquo etc13 DIFFERENCE BEETWEN INSURANCEAND ASSURANCEAssurance is older in history and it was used to describe all types ofinsurances From 1826 the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine fire etc
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
is a financial device to spread the risks and losses of few people among alarge number of people as people prefer small fixed liability instead of biguncertain and changing liabilityInsurance can be defined as a ldquolegal contract between two parties wherebyone party called insurer undertakes to pay a fixed amount of money on thehappening of a particular event which may be certain or uncertainrdquo Theother party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possiblelosses on account of risks and perils It provides financial compensation forthe losses suffered due to the happening of any unforeseen events12 IMPORTANCE OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 8Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financialintermediary Today insurance industry is one of the most growing sectors inIndia There is lot of potential in the Indian Insurance IndustryThere are many issues which require study The scope of the study ofinsurance industry of India would be very great as there are ongoingdevelopments in the industry after the opening of the sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow
by foreign partnersAnother major issue is the effects on LIC after the entry of private players inthe market Though market share of LIC has been affected it has improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new productranges insurance brokersrsquo regulation incentive scheme of developmentofficers of LIC etc So it offers lot of scope for studying the insuranceindustryRight now the insurance industry has great opportunities in a country likeIndia or China which huge population Also the penetration of insurance inProjects Thesis Dissertation ndash projectsparadisecom 9India is very low in both life and non-life segment so there is lot potential tobe tappedBefore starting the discussion on insurance industry and related issues wehave to start with the basics of insurance So first we understand what isinsurance How the word lsquoinsurancersquo is different from the wordlsquoassurancersquo etc13 DIFFERENCE BEETWEN INSURANCEAND ASSURANCEAssurance is older in history and it was used to describe all types ofinsurances From 1826 the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine fire etc
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
by foreign partnersAnother major issue is the effects on LIC after the entry of private players inthe market Though market share of LIC has been affected it has improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new productranges insurance brokersrsquo regulation incentive scheme of developmentofficers of LIC etc So it offers lot of scope for studying the insuranceindustryRight now the insurance industry has great opportunities in a country likeIndia or China which huge population Also the penetration of insurance inProjects Thesis Dissertation ndash projectsparadisecom 9India is very low in both life and non-life segment so there is lot potential tobe tappedBefore starting the discussion on insurance industry and related issues wehave to start with the basics of insurance So first we understand what isinsurance How the word lsquoinsurancersquo is different from the wordlsquoassurancersquo etc13 DIFFERENCE BEETWEN INSURANCEAND ASSURANCEAssurance is older in history and it was used to describe all types ofinsurances From 1826 the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine fire etc
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
The word assurance indicated certainty In life insurance there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage thepropertyThe insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insuranceProjects Thesis Dissertation ndash projectsparadisecom 10The principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider14 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost goodfaithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis means that if the insured suffers a loss against which the policy hasbeen made he shall be fully indemnified only to the extent of loss Inother words the insured is not entitled to make a profit on his loss(3) Principle of subrogationThis means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
an alternative source is involved The insurer before the settlement of theclaim may exercise the right In other words the insurer is entitled torecover from a negligent third party any loss payments made to theProjects Thesis Dissertation ndash projectsparadisecom 11insured The purposes of subrogation are to hold the negligent personresponsible for the loss and prevent the insured from collecting twice forthe same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position15 HISTORY OF INSURANCEProjects Thesis Dissertation ndash projectsparadisecom 12The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of thecarvan by giving loans which were later repaid with interest when the goodsarrived safelyThe concept of insurance as we know today took shape in 1688 at a placecalled Lloydrsquos Coffee House in London where risk bearers used to meet to
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
transact business This coffee house became so popular that Lloydrsquos becamethe one of the first modern insurance companies by the end of the eighteenthcenturyMarine insurance companies came into existence by the end of theeighteenth century These companies were empowered to write fire and lifeinsurance as well as marine The Great Fire of London in 1966 caused hugeloss of property and life With a view to providing fire insurance facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of LifeInsurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community The insuranceProjects Thesis Dissertation ndash projectsparadisecom 13companies which came into existence between 1818 and 1869 treatedIndian lives as subnormal and charged an extra premium of 15 to 20 percent The first Indian insurance company the Bombay Mutual LifeAssurance Society came into existence in 1870 to cover Indian lives atnormal rates
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
The Insurance Act 1938 the first comprehensive legislation governing bothlife and non-life branches of insurance were enacted to provide strict statecontrol over insurance business This amended insurance Act looked intoinvestments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life insurance business in India Insurancebusiness flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided tonationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of lifeinsurance was followed by general insurance in 197216 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)1048766 1818 British introduced the life insurance to India with theProjects Thesis Dissertation ndash projectsparadisecom 14establishment of the Oriental Life Insurance Company in Calcutta1048766 1850 Non life insurance started with Triton InsuranceCompany1048766 1870 Bombay Mutual Life Assurance Society is the first Indiaowned life insurer1048766 1912 The Indian Life Assurance Company Act enacted toregulate the life insurance business1048766 1938 The Insurance Act was enacted1048766 1956 Nationalization took place Government took over 245Indian and foreign insurers and provident societies1048766 1972 Non-life business nationalized General InsuranceCorporation (GIC) came into being1048766 1993 Malhotra committee was constituted under thechairmanship of former RBI chief R N Malhotra todraw a blue print for insurance sector reforms
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
1048766 1994 Malhotra committee recommended reentry of privateplayersProjects Thesis Dissertation ndash projectsparadisecom 151048766 1997 IRDA (Insurance Regulatory and DevelopmentAuthority) was set up as a regulator of the insurancemarket in India1048766 2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies1048766 2001 Royal Sundaram was the first non-life private player tosell an insurance policy1048766 2002 Bank allowed to sell insurance plans as TPAs enter thescene insurers start setting non-life claims in thecashless mode17 MEANING OF LIFE INSURANCEThere are three parties in a life insurance transaction the insurer theinsured and the owner of the policy (policyholder) although the owner andProjects Thesis Dissertation ndash projectsparadisecom 16the insured are often the same personAnother important person involved in a life insurance policy is thebeneficiary The beneficiary is the person or persons who will receive thepolicy proceeds upon the death of the insuredLife insurance may be divided into two basic classes ndash term and permanentbull Term life insurance provides for life insurance coverage for aspecified term of years for a specified premium The policy does notaccumulate cash valuebull Permanent life insurance is life insurance that remains in force untilthe policy matures unless the owner fails to pay the premium whenduebull Whole life insurance provides for a level premium and a cash value
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
table included in the policy guaranteed by the company The primaryadvantages of whole life are guaranteed death benefits guaranteedcash values fixed and known annual premiums and mortality andexpense charges will not reduce the cash value shown in the policybull Universal life insurance (UL) is a relatively new insurance productintended to provide permanent insurance coverage with greaterflexibility in premium payment and the potential for a higher internalrate of return A universal life policy includes a cash accountPremiums increase the cash accountIf you want insurance protection only and not a savings and investmentproduct buy a term life insurance policyProjects Thesis Dissertation ndash projectsparadisecom 17If you want to buy a whole life universal life or other cash value policyplan to hold it for at least 15 yearsCanceling these policies after only a few years can more than double yourlife insurance costs Check the National Association of InsuranceCommissioners website (wwwnaicorgcis) or your local library forinformation on the financial soundness of insurance companies18 HISTORY OF LIFE INSURANCERisk protection has been a primary goal of humans and institutionsthroughout history Protecting against risk is what insurance is all aboutOver 5000 years ago in China insurance was seen as a preventativemeasure against piracy on the sea Piracy in fact was so prevalent that as away of spreading the risk a number of ships would carry a portion of
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
another ships cargo so that if one ship was captured the entire shipmentwould not be lostIn another part of the world nearly 4500 years ago in the ancient land ofBabylonia traders used to bear risk of the caravan trade by giving loans thathad to be later repaid with interest when the goods arrived safely In 2100BC the Code of Hammurabi granted legal status to the practice Itformalized concepts of ldquobottomryrdquo referring to vessel bottoms andldquorespondentiardquo referring to cargo These provided the underpinning formarine insurance contracts Such contracts contained three elements a loanon the vessel cargo or freight an interest rate and a surcharge to cover thepossibility of loss In effect ship owners were the insured and lenders werethe underwritersProjects Thesis Dissertation ndash projectsparadisecom 18Life insurance came about a little later in ancient Rome where burial clubswere formed to cover the funeral expenses of its members as well as helpsurvivors monetarily With Romes fall around 450 AD most of theconcepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds Theseprovided forms of member insurance covering risks like fire flood theftdisability death and even imprisonmentDuring the feudal period early forms of insurance ebbed with the declineof travel and long-distance trade But during the 14th to 16th centuries
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
transportation commerce and insurance would again reemergeInsurance in India can be traced back to the Vedas For instanceyogakshema the name of Life Insurance Corporation of Indias corporateheadquarters is derived from the Rig Veda The term suggests that a form ofcommunity insurance was prevalent around 1000 BC and practiced by theAryansAnd similar to ancient Rome burial societies were formed in the Buddhistperiod to help families build houses and to protect widows and children1048766 Modern InsuranceIllegal almost everywhere else in Europe life insurance in England wasvigorously promoted in the three decades following the Glorious Revolutionof 1688 The type of insurance we see today owes its roots to 17th centuryEngland Lloyds of London or as they were known then Lloyds CoffeeProjects Thesis Dissertation ndash projectsparadisecom 19House was the location where merchants ship owners and underwriters metto discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealedstrongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names ofprominent people who were seriously ill bets were placed at Lloydrsquos ontheir anticipated dates of death Reacting against such practices 79 merchantunderwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers onpeoples deaths ceased in 1774 when parliament forbade the practice1048766 Insurance moves to AmericaThe US insurance industry was built on the British model The year 1735saw the birth of the first insurance company in the American colonies inCharleston SC The Presbyterian Synod of Philadelphia in 1759 sponsoredthe first life insurance corporation in America for the benefit of ministersand their dependents And the first life insurance policy for the generalpublic in the United States was issued in Philadelphia on May 22 1761But it wasnt until 80 years later (after 1840) that life insurance really tookoff in a big way The key to its success was reducing the opposition fromreligious groupsIn 1835 the infamous New York fire drew peoples attention to the need toprovide for sudden and large losses Two years later Massachusetts becamethe first state to require companies by law to maintain such reserves TheProjects Thesis Dissertation ndash projectsparadisecom 20great Chicago fire of 1871 further emphasized how fires can cause hugelosses in densely populated modern cities The practice of reinsurancewherein the risks are spread among several companies was devisedspecifically for such situationsWith the creation of the automobile public liability insurance which first
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the WorkmensCompensation Act which made it mandatory for a company to insure itsemployees against industrial accidentsDuring the 19th century many societies were founded to insure the life andhealth of their members while fraternal orders provided low-cost membersonlyinsurance Even today such fraternal orders continue to provideinsurance coverage to members as do most labor organizations Manyemployers sponsor group insurance policies for their employees providingnot just life insurance but sickness and accident benefits and old-agepensions Employees contribute a certain percentage of the premium forthese policies1048766 Final ThoughtsEven though the American insurance industry was greatly influenced byBritain the US market developed somewhat differently from that of theUnited Kingdom Contributing to that was Americas size land diversityand the overwhelming desire to be independent As America moved from acolonial outpost to an independent force from a farming country to anProjects Thesis Dissertation ndash projectsparadisecom 21industrial nation the insurance business developed from a small number ofcompanies to a large industryInsurance became more sophisticated offering new types of coverage and
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
diversified services for an increasingly complex country19 KEY FEATURES OF LIFE INSURANCE1) Nomination -When one makes a nomination as the policyholder you continue to be theowner of the policy and the nominee does not have any right under thepolicy so long as you are alive The nominee has only the right to receive thepolicy monies in case of your death within the term of the policy2) Assignment -If your intention is that your policy monies should go only to a particularperson you need to assign the policy in favor of that person3) Death Benefit -The primary feature of a life insurance policy is the death benefit it providesPermanent policies provide a death benefit that is guaranteed for the life ofthe insured provided the premiums have been paid and the policy has notbeen surrendered4) Cash Value -Projects Thesis Dissertation ndash projectsparadisecom 22The cash value of a permanent life insurance policy is accumulatedthroughout the life of the policy It equals the amount a policy owner wouldreceive after any applicable surrender charges if the policy weresurrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle thepolicy owner to share in the companys divisible surplus6) Paid-Up Additions -Dividends paid to a policy owner of a participating policy can be used innumerous ways one of which is toward the purchase of additional coverage
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
called paid-up additions7) Policy Loans -Some life insurance policies allow a policy owner to apply for a loan againstthe value of their policy Either a fixed or variable rate of interest is chargedThis feature allows the policy owner an easily accessible loan in times ofneed or opportunity8) Conversion from Term to Permanent -When in need of temporary protection individuals often purchase term lifeinsurance If one owns a term policy sometimes a provision is available thatwill allow her to convert her policy to a permanent one without providingadditional proof of insurability9) Disability Waiver of PremiumProjects Thesis Dissertation ndash projectsparadisecom 23Waiver of Premium is an option or benefit that can be attached to a lifeinsurance policy at an additional cost It guarantees that coverage will stay inforce and continue to grow110 BENEFITS OF LIFE INSURANCE1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against anyunfortunate event of the future2) Tax Deduction -Under section 80C of the Income Tax Act of 1961 one can get tax deductionon premiums up to one lakh rupees Life Insurance policies thus decrease thetotal taxable income of an individualProjects Thesis Dissertation ndash projectsparadisecom 243) Loans -An individual can easily access loans from different financial institutions by
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
pledging his insurance policies4) Retirement Planning -What had provided protection against the financial consequences ofpremature death may now be used to help them enjoy their retirement yearsMoreover the cash value can be used as an additional income in the old age5) Educational Needs -Similar to retirement planning the cash values that flow from ones lifeinsurance schemes can be utilized for educational needs of the insurer or hischildren111 ROLE OF LIFE INSURANCE IN THEGROWTH OF THE ECONOMYThe Life Insurance Industry has an enviable track record among publicsector units It has a Consistent profit and dividend paying recordaccompanied by a steady growth in its financial resources Throughinvestments in the Government sector and socially- oriented sectors theIndustry has contributed immensely to the nations development Theindustry is recognized as one of the largest financial Institutions in thecountry The ventures initiated by the industry in the areas of Mutual FundProjects Thesis Dissertation ndash projectsparadisecom 25Housing Finance has done exceedingly well in recent years To protect thecountrys foreign exchange reserves the reinsurance arrangement are soorganized that maximum retention is made possible within the country whileat the same time protecting interests of the policy holders
CHAPTER-2
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
INTRODUCTION TO THE COMPANYProjects Thesis Dissertation ndash projectsparadisecom 26
21 ABOUT RELIANCE LIFE INSURANCEReliance Life Insurance Company Limited is a part of Reliance Capital Ltdof the Reliance - Anil Dhirubhai Ambani Group Reliance Capital is one ofIndiarsquos leading private sector financial services companies and ranks amongthe top 3 private sector financial services and banking companies in termsProjects Thesis Dissertation ndash projectsparadisecom 27of net worth Reliance Capital has interests in asset management and mutualfunds stock broking life and general insurance proprietary investmentsprivate equity and other activities in financial servicesReliance Capital Limited (RCL) is a Non-Banking Financial Company(NBFC) registered with the Reserve Bank of India under section 45-IA ofthe Reserve Bank of India Act 1934Reliance Capital sees immense potential in the rapidly growing financialservices sector in India and aims to become a dominant player in thisindustry and offer fully integrated financial servicesReliance Life Insurance is another steps forward for Reliance CapitalLimited to offer need based Life Insurance solutions to individuals andCorporate22 HISTORYReliance Capital Limited announced the launch of its life insurance businesson February 1 2006 This was after obtaining the required regulatoryapprovals from the Registrar Of Companies and the Insurance Regulatory
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
and Development AuthorityIt was in August 2005 that the ball was set rolling when Reliance CapitalLimited the financial arm of Reliance ndash Anil Dhirubhai Ambani GroupProjects Thesis Dissertation ndash projectsparadisecom 28(ADAG) ndash announced the requisition of 100 shareholding in AMP SanmarLife Insurance Company Limited and the formal transfer of shares tookplace in October 2005 The company will issue all policy contracts under theReliance Life Insurance Company limited name All the existing policycontracts also stand transferred to the Reliance Life Insurance entity with allthe original contractual terms and commitments intact23 JOURNEY SO FARhellip1048766 2005August Anil Dhirubhai Ambani Group (ADAG) announces theacquisition of 100 percent shareholding in AMP Sanmar Life InsuranceCo Ltd1048766 2006January 17 Mr Nandgopal participates in a one-day conference onlsquoOptimising growth opportunities through Distribution MatrixProjects Thesis Dissertation ndash projectsparadisecom 29lsquoEmerging Bancassurancersquo organized by the Asia Insurance Post at theTaj President MumbaiFebruary 1 Rliance Life Insurance officially launchedFebruary 16 17 18 Strategy meet at the Reliance ManagementInstitute Amongst those who participate are the CEO COO FunctionalHeads Regional Managers and Regional Sales ManagersFebruary 26 A Puja held at the Churchgate office situated in ExpressBuilding 4th Floor 14 lsquoErsquo Road MumbaiMarch 1 Churchgate office inaugurated by Mr Amitabh
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Jhunjhunwala Mr Amitabh Chaturvedi and Mr NandgopalMarch 6 Shifting to the new premises at Churchgate commencesMarch 7 The new office at Chennai at the Trapezium First Floor 39 Nelson Manickam Road inaugurated by their CEO Mr NandgopalMr KV Srinivasan and Mr Sureshbabu also graced the occasion24 ROLE OF IT AT RELIANCE LIFEINSURANCE1) World Class Data Centre -They plan to establish a Primary Data Centre at Navi Mumbai(Dhirubhai Ambani Knowledge City) which will cater to their companyneeds across India with fail-over capability to their Chennai Data CentreProjects Thesis Dissertation ndash projectsparadisecom 30within the same business day in occurance if an incident or Disasterhappens2) Inter Office Connectivity -All their Branch Area and Regional offices will beinterconnected to their Data Centre with a 24x7 access to CoreApplications like Lotus Mail Life-Asia and Internet Applications Thiswill enable their associates to work faster and better with high-speedInternet connectivity and also ensure faster Turn Around Time for theircustomers3) Customer Care Centre -They will host a centralized Customer Care Centre atDhirubhai Ambani Knowledge City at Navi Mumbai which caterservices to internal and external queries and complications A customerRelationship Management Tool (CRM) and Lead Management System(LMS) are in progress4) Web Portal -This portal will be an interface between both internal employees
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
and their external users Some of the functions included in their portal arePolicy Tracking Systems Corporate News Quality Checking SystemUnder Writing Medical System and Agent Management System etc5) R World -Projects Thesis Dissertation ndash projectsparadisecom 31Reliance Mobile R-World will provide online information abouttheir Company Products and Policy Services to their existing customersAgentsAdvisors and Lead Generators6) SMS Alerts -SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts willinclude Company News and WelcomeBirthdayAnniversary messageetc Customer Alerts will include WelcomeBirthdayAnniversarymessage Policy Dispatch Details Policy Servicing SMS like PremiumReceipt and Renewal Premium reminders etc7) Life and Group Asia -Single Life and Group Life details will be captured and managedby Life and Group Asia A common middleware between theseapplications will enable Group Life Customers to view their individualSingle Life Insurance Plan details taken with Reliance Life Insurance andvice versa8) Advisor Lounge -It is a dedicated area for Reliance Life InsuranceAgentsAdvisors in all the branches across India This Lounge will beequipped with desktops and printers with Internet connectivity wheretheir Advisors can bring in the prospects and can have discussions across
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
the table and they can create and print quotes The AgentsAdvisors canuse this area to service their existing customers9) Document Management System -Projects Thesis Dissertation ndash projectsparadisecom 32DMS will enable both policy issuance and contract servicingthrough an automated workflow which yields a faster Turn around Timeto both internal and external users This application will enable them tohave a paperless office and thus mitigate the risk of losing vitalrecordspapers10) Wireless Data Access -This will enable identified Top Sales Managers and Top Advisorsto access real time data for both LMS and CRM on the fly through HandheldPDA device11) SAP ndash ERP Modules -SAP (Finance and HR Modules) will automate the ExpenseTravel and Leave Management Systems25 MISSIONThe mission of Reliance Life Insurance Company Limited is to be the best inevery sphere- business results customer care and employee focus The aimof the company is to Think Bigger and Think Better26 CORE VALUESReliance Life Insurance Company Limited has some core values which arelisted as followsProjects Thesis Dissertation ndash projectsparadisecom 331) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun27 FUTURE PLANS1048766 Forty-four new branches to be opened across the country in the
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
coming months and a pan India presence with 162 branches in thecoming year1048766 A state-of-the-art customer care centre will provide continuousresponsive services to the caller and promptly address queries collatefeedback and suggestions from the caller who may be bothprospective and existing clientele and from channel partners inChennai and Mumbai1048766 It will be launching additional products aimed at providingunparalleled service to its valued clientele28 HEAD ndash OFFICEProjects Thesis Dissertation ndash projectsparadisecom 34Reliance Life Insurance Company LimitedThe Trapezium39 First FloorNelson Manickam RoadChennai ndash 600 02929 BRANCHESThey have so many branches and substations in the India They have around160 branches in the India And they have planned to open more branchesacross the country in the coming monthsProjects Thesis Dissertation ndash projectsparadisecom 35
CHAPTER ndash 3PRODUCT MIXProjects Thesis Dissertation ndash projectsparadisecom 36
31 TRADITIONAL PLAN-Life insurance products are designed to suit the requirementsof customers Fundamentally the product provide for1048766 Risk cover1048766 Investment1048766 Health coverProjects Thesis Dissertation ndash projectsparadisecom 37In every product to a certain degree risk cover is imperativefor it to fall under the category of insurance Based on the coverage of the
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
product the premiums are calculated and the customer pays accordingly Inorder to suggest the right product it is essential for an agent to understandthe requirements of the customer wellReliance Life Insurance Company Limited has offered 9traditional plans to the customers which are listed as follows1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian PlanEach of the above traditional plans is discussed as follows1) Reliance Term plan -This insurance policy is designed for those who only want life cover for theprotection of their family and do not wish to save for themselves It can alsobe useful to business firms that wish to provide financial security to theirbusiness against the sudden loss of partners or valuable manpower SinceProjects Thesis Dissertation ndash projectsparadisecom 38there is no saving element or bonus provision the premium is very lowHence this is a high-risk plan with a low premium1048766 Features -a) Purely a term planb) Entry age minimum 18 years and maximum 65 yearc) Maximum premium paying term is 30 yeard) Loan facility NAe) Maturity amount = Sum assured2) Reliance Whole Life Plan -This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
benefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost1048766 Features -a) It is a whole life insurance policy with profitsb) Low cost life coverc) Maturity age is 85 year or 99 years last birthday as chosend) Maturity amount = Sum assured + Vested bonuse) Tax benefit is availableProjects Thesis Dissertation ndash projectsparadisecom 393) Reliance Child Plan -This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney This is especially true when it comes to paying large sums of moneyfor higher education as and when your son or daughter is studying to becomean Engineer a Doctor or specialize in some other field or is perhapsplanning to go abroadThis money is payable in equal installments over the last 4 years of thepolicy term1048766 Features -I Minimum entry age is 20 year and maximum 60 yeara) Minimum sum assured is Rs 25000b) Minimum premium paying term is 5 year and maximum20 yearc) Tax benefit is availabled) Maturity amount = Four equal installment of sum insuredin last four year plus vested bonus in the last yeare) Loan facility is available4) Reliance Endowment Plan -Projects Thesis Dissertation ndash projectsparadisecom 40Reliance Life Insurancersquos Reliance Endowment Plan is the key to all your
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
financial needs It is an inexpensive and easy way to protect you yourfamily or your businessIn a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughterrsquos wedding your childrsquos universityeducation or even a new office for your business - by eliminating the burdenthat a shortage of money createsIn the event of your untimely death Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial support thatit providesReliance Endowment Plan also gives you the additional benefit ofparticipating in the companyrsquos profits which you will receive at the end ofthe policy period1048766 Features -a) Entry age minimum is 5 year and maximum 65 yearb) Maturity age minimum is 18 year and maximum 75 yearc) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 yearProjects Thesis Dissertation ndash projectsparadisecom 41d) Minimum sum assured is Rs 25000 or as determined by theminimum premiume) Maximum sum assured is Rs 500000 (entry age below 18years and no limit for entry age 18 and above)f) Premium mode annual half yearly quarterly and monthly(by salary deduction only)g) Loan up to 90 of the surrender value of the policyh) Maturity amount = Guaranteed sum assured + Reversionarybonus5) Reliance Special Endowment Plan -This insurance policy is designed for people who wish to combine savingswith extended security The unique feature of this policy is that life
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
protection continues for five years after you have stopped the payment ofpremium Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years are characteristics of the policyThis plan also participates in the profits1048766 Features -a) Entry age minimum 12 year and maximum 65 yearb) Minimum sum assured is Rs 25000c) Minimum premium paying term is 10 year and maximum 40yearProjects Thesis Dissertation ndash projectsparadisecom 42d) Unique feature of this policy is that five year life protectioncontinues after you have stopped the payment of premiume) Tax benefit is availablef) Under this policy bonus is compounded yearlyg) Loan facility is availableh) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date6) Reliance Cash Flow Plan -This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time but create through regular premium payments aperiodic return of lump sums which become available for reinvestment athigher returns while providing simultaneously substantial life coverAlternatively it can be used to meet any immediate financial crisis in thefamily like your sons college admission your daughters engagement andrenovation of your home or perhaps a holiday abroad
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
The money is payable in installments The first installment is paid at the endof the 4th year and thereafter at the end of every 3rd year1048766 Features-a) Plan with profitsb) Minimum entry age is 15 year and maximum is 63 yearProjects Thesis Dissertation ndash projectsparadisecom 43c) Maximum premium paying term is 34 yeard) Loan facility is not availablee) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediatelyf) In case of survival up to maturity date all premium paidg) Rider accident death and critical illnessh) Mode of payment is available7) Reliance Credit Guardian Plan -This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelersb) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for single and regular is availablee) Premium paying term is 23 of loan period and remainingperiod paid by the company8) Reliance Special Credit Guardian Plan -Projects Thesis Dissertation ndash projectsparadisecom 44This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death disability or criticalillnesses1048766 Features -a) Loan protection against home home improvement twowheelers and four wheelers
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is availabled) Premium payment option for regular and single is availablee) Premium payment term is 23 of loan period and remainingperiod paid by the companyf) Maturity amount = All the premium paid amountg) Tax benefit is available32 UNIT LINKED PLANA unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of sharesProjects Thesis Dissertation ndash projectsparadisecom 45Each premium paid by the insured person is split a part is used toprovide life assurance cover while the balance (after the deduction of costsexpenses etc) is used to buy units in a unit trustIn this way a small investor can benefit from investment in a managedfund without making a large financial commitment As they are linked to thevalue of shares unit linked policies can go up or down in valuePolicyholders can surrender the policy at any time and the surrender value isthe selling price of the units purchased by the date of cancellation 9lessexpense) A small part of the contribution is used for providing life coverand the balance is invested in unit Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insuredReliance Life Insurance Company Limited has also offered the twoUnit Linked Plans which are listed as follows1) Reliance Market Return Plan2) Reliance Golden Years PlanAmongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited Theabove two ULIP plans are discussed as follows1) Reliance Market Return Plan -
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Reliance Market Return Fund is the unit-linked product that helps you investin the financial markets in a combination of investment instruments of yourProjects Thesis Dissertation ndash projectsparadisecom 46choice You can enjoy the returns from the markets without the trouble ofmonitoring and managing your own investment portfolio and keeping trackof the market movements At the same time your investment premiumsprovide you with insurance cover Reliance Market Return Fund unit-linkedinsurance plan provides you with a basket of fund options that balances yourreturn and risk exposure while providing life cover at the same time1048766 Features -a) Minimum entry age is 30 days and maximum entry ageis 65 yearb) Maximum policy term 40 year and minimum policyterm 5 yearc) Mode of premium as annual quarterly half yearly andmonthly Rs 1000 (for salary deduction only) and Rs2500 (standing ordercredit card)d) Top up premium minimum Rs 2500e) Option of investment fundi Capital secure 100 fixed interest securitiesii Balanced minimum 80 fixed interest securitiesand maximum 20 in equityiii Equity 100 equityiv Growth minimum 60 fixed interest securities andmaximum 40 in equityf) Loan facility is not availableg) One switches every year free and subsequent switchescharged 1 of the amount switchedProjects Thesis Dissertation ndash projectsparadisecom 47h) Partial withdrawals per year under regular and singlepremium options is 2 timesi) Lock in period till today is 3 year
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
j) Minimum unit account balance after each withdrawalsis Rs 100002) Reliance Golden Years Plan -Reliance Golden Years Planhellip The Reliance Life Insurance lsquono-worry stayhappyrsquoretirementplan Reliance Golden Years Plan is a flexible package thatprovides freedom of choice in choosing the type of investment life covervesting options such as commuting and annuity options Contributionsprovide Income tax savings as wellReliance Golden Years Plan a flexible pension product is available for allindividuals who are between the ages of 18 and 651048766 Features -a) Entry age minimum is 18 year and maximum 65 yearb) Minimum premium amount Rs 10000 and maximumis unlimitedc) Mode of premium payment is availabled) Pension plan with risk cover and without risk covere) Choice of investmentProjects Thesis Dissertation ndash projectsparadisecom 48i Capital secure fund ndash 80 in equity and 20 ingovernment securityii Balanced fund ndash 80 in government and 20in equityf) No loan facility is availableg) Tax benefit is availableh) Annuity optionsi Annuity payable for lifeii Annuity payable for 51015 years certain andthereafter with lifeiii Annuity payable for life with return of capitalon death of the annuitant
CHAPTER ndash 4HUMAN RESOURCE MANAGEMENTProjects Thesis Dissertation ndash projectsparadisecom 49
41 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Recruitment is the process of finding and attracting capable applicants foremployment The process begins when new recruits are sought and endswhen their applications are submitted The result is a pool of applicants fromwhich new employees are selectedProjects Thesis Dissertation ndash projectsparadisecom 50In this company the Sales Manager who recruits the advisorsagents forselling the products of the company does the recruitment The advisorsshould have at least passed the SSC examination They must pass the prerecruitmentexamination which is conducted by the Insurance Institute ofIndia Mumbai or any other approved examination body After clearing theexamination the code will be provided to them and the license will also begiven to them the validity the license would be 3 years After all theserequirements the person will become an insurance advisor in the company42 SELECTIONSelection is the process of picking individuals (out of the pool of jobapplications) with requisite qualifications and competence to fill job in theorganization In simple words it is the process of differentiating betweenapplicants in order to identify these with a greater likelihood of success in ajobThe Branch Manager which includes- will conduct the process of selectionof Sales Manager1) Personal Interview -The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Reliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch ManagerProjects Thesis Dissertation ndash projectsparadisecom 512) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the companyProjects Thesis Dissertation ndash projectsparadisecom 521048766 Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team43 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
employee performance by increasing an employeersquos ability to performthrough learning usually by changing the employeersquos attitude or increasinghisher skills and knowledge The need for training and development isdetermined by the employeersquos performance deficiency computed as followsProjects Thesis Dissertation ndash projectsparadisecom 53Training amp Development = Standard Performance ndash Actual PerformanceThey are providing 100 hours training to their advisors whoare newly recruited They are also providing the product training to theiradvisors and Sales Managers who are newly recruited The 100 hourstraining is to be conducted at Net Bios Computer Academy whereas theproduct training is to be conducted at NIS SPARTA The NIS SPARTAInstitute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA totrain agentsadvisors44 CAREER DEVELOPMENTThey are also providing career development plans which will identifypotential and create avenues for growth45 COMMUNICATIONCommunication is the process through which an individual can exchangetheir beliefs things information and experience to others In simple wordsit is the process of exchanging the information from one person to anotherThey are providing an open environment which enabling free interaction
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
between all levels The communication is provided in the following mannerProjects Thesis Dissertation ndash projectsparadisecom 54Projects Thesis Dissertation ndash projectsparadisecom 55BRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O
Projects Thesis Dissertation ndash projectsparadisecom 561048766 Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers andSales Managers to AgentsAdvisors and then Branch Head to RegionalHead then different Regional Head to Regional Head then Regional Headto Channel Head then to Chief Marketing Officer (CMO) then to ChiefExecutive Officer (CEO)46 INCENTIVESIncentives are monetary benefits paid to workmen in recognition of theiroutstanding performance They are providing an aggressive reward andrecognition plans which are including sales incentives47 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includesemployees associates and their familiesProjects Thesis Dissertation ndash projectsparadisecom 574) Reliance Life Insurance in a team building mode and is looking forperformance driven achievement oriented and challenge loving
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
performance48 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual withrespect to hisher performance on the job and hisher potential fordevelopment Performance appraisal is a formal structured system ofmeasuring and evaluating an employeersquos job related behaviors and outcomesto discover how and why the employee is presently performing on the joband how the employee can perform more effectively in the future so that theemployee organization and society all benefitThey are providing a balanced scorecard approach for strategy deploymentand performance measurement which goals and measure financial customerfocused process related and employee development related initiatives Inaddition to this the Branch Manager should measure the performance of theSales Managers at every six months and the Sales Manager should measurethe performance of the advisorsagents If the performance is best thenheshe will be promptedProjects Thesis Dissertation ndash projectsparadisecom 58
49 ORGANIZATION FORM ANDSTRUCTURE410 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
CEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomersProjects Thesis Dissertation ndash projectsparadisecom 598) Finance
CHAPTER ndash 5MARKETING DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 60
51 DISTRIBUTION CHANNELReliance Life Insurance Company Limited is using five types ofdistribution channel which are as follows1) Agency -Independent insurance agents represent a number of companiesand can research these companiesrsquo products to find the right combinationfor their clients Independent agents amp insurance producer groups aregrowing in prevalence Although producer groups are in their infancytheir emergence may potentially be realignment in the distribution offinancial services Independent shops realized that by pooling productionand funding a central support office they had increased buying powerThe one type of distribution channel which Reliance LifeInsurance Co Ltd is using is an agency This channel works as followsBranchManagersAdvisorsCustomersProjects Thesis Dissertation ndash projectsparadisecom 612) Bank Assurance -
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
While a lot of bank relationships with insurance companieshave been established life insurance sales have been slower than onewould expect he primary bank insurance activities have been thedistribution of annuities credit life and direct marketing insuranceBanks are failing to incorporate successful sales tactics used to sell otherfinancial services like investmentsAnother type of distribution channel is bank assurance Thischannel is tie up with banks In this channel the advisors using ortargeting the bank customers to make a business with them ie to sell thepolicy of the company3) Corporate-To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel for howindependent advisors handle trust services a research was performedwith independent advisors across several brokerdealers and custodiansThe interviews revealed that demand is greatest for living trusts amongindependent advisors followed by demand for corporate trustee servicesAnother type of distribution channel is corporate which arefor employee benefits This channel is tie up with corporate or smallenterprises Through these small enterprises the advisors will sell theproductspolicy to customers of the small enterprisesProjects Thesis Dissertation ndash projectsparadisecom 624) Rural Benefits-Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks These firms have steadilycaptured assets primarily at the expense of the banks The number of
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
non-bank trust companies has increased in recent years as independenttrust companies have emerged and more brokerdealers are integratedservices Insurance companies view full-service brokers as a potentiallynew distribution channel as wellAnother type of distribution channel is rural benefits Thischannel works as a dealership In this channel the dealers will sell thepolicy to the target customers5) Web World-Direct sales of life insurance are growing rapidly but many ofthe traditional full-serve players seem to be letting it go Across allfinancial services consumers are expressing a willingness to deal with avariety of providers on the web Web sites are starting to pop up offeringconsumer insurance products especially designed for distribution over thewebAnother type of distribution channel is web world This channelis tie up with customer database In this channel the advisors will sell thepolicy to the target customers which are taken from the customerdatabase are listed in the websiteProjects Thesis Dissertation ndash projectsparadisecom 63
52 PROMOTIONAL PROGRAMMES ampTARGET SEGMENTPromotional programmes and target segment are related to each otherThe promotional programmes are made to motivate the advisorsagentsand sales managers to do more business ie to sell the more policies TheReliance Life Insurance Co Ltd has made three promotional schemes
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
which are as follows1) Shubh ndash Arambh-This promotional scheme is detailed as followsSLAB (WRP) REWARDACHIEVERSProjects Thesis Dissertation ndash projectsparadisecom 6430000 Reliance Life T-Shirt50000 Table Top Clock75000 Leather Bag100000 World Space Radio150000 LG Microwave- 19L200000 DVDVCDMP3 Player300000 Sony Music SystemSUPER ACHIEVERS500000 LG Refrigerators GL-233750000 LG Air Conditioner 1T1000000 Sony Digital Camcorder1500000 Trip to Dubai 3D4N2000000 Hero Honda SplenderSTAR ACHIEVERS5000000 Maruti Alto Std7500000 Maruti Swift Lxi10000000 GM Aveo 14LSLogin 1st April to 31st May lsquo06Issuance till 15th June lsquo062) RARE-The full form of RARE is Reliance Advisorrsquos RewardExperience This programs consists of1 New Advisor Incentive Program2 Board of AdvisorsProjects Thesis Dissertation ndash projectsparadisecom 653 Annual Discovery Series4 Advisor Career Progression5 RARE Club ndash Loyalty ProgramThe above programs are described as follows1 RARE Program New Advisor Incentives-1048766 CriteriaThere will be two levels in the New Advisor IncentiveprogramA Launch Pad
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
B Take Off2 RARE Program Board of Advisors-1048766 CriteriaThere will be two levels in the Board of Advisors programA Time PeriodB Parameters3 RARE Program Discovery Series-1048766 CriteriaThere will be six levels in the Discovery Series programA Qualification periodB Business criteriaProjects Thesis Dissertation ndash projectsparadisecom 66C The qualification criteria will be the same for both the Globaland the National Discovery SeriesD Qualification for the Global Discovery SeriesE Qualification for the National Discovery SeriesF The top 150 will bb calculated based on WRP (Weighted RecdPremium)4 RARE Program Advisor Career Progression-1048766 Advisor Career ProgressionA Business AssociateB Sales Manager5 RARE Privilege Club-1048766 LevelsA The RARE Club will have 6 different levelsB The criteria for entry into each level will be based onI Business (WRP)II PersistencyIII Product MixC The qualification period isI Logins from 1st Apr rsquo06 to 31st Mar lsquo07II Issuances from 1st Apr rsquo06 to 15th Apr lsquo071048766 Qualification CriteriaProjects Thesis Dissertation ndash projectsparadisecom 67Level WRP (Rs) TraditionalProductsPersistencyTopaz 150000 60 80Pearl 500000 60 80
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Sapphire 1000000 60 80Emerald 1500000 50 85Ruby 2500000 50 85Diamond 5000000 50 853) Elite Club Scheme-In this scheme the advisor who have login the regularpremium of Rs 2 00000 will be eligible for the Elite ClubMembership53 COMPARATIVE STUDYPresently there are 15 Life insurance companies in the countryThere is only one public sector company LIC and the rest 14 are privatesector Although LIC has been dominating the Life Insurance business sincepast few years the private players have now started to take the momentumProjects Thesis Dissertation ndash projectsparadisecom 681) Major Market Players -1048766 Birla Sun Life Insurance Company -Birla Sun Life Insurance Company is a 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector companyThe company was registered on 3112001 The market share for FY 2005-06 was 1891048766 HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registeredon 23102000 The market share for FY 2005-06 was 2871048766 ICICI Prudential Life Insurance -ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registeredon 24112000 The market share for FY 2005-06 was 7351048766 Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
forerunner in the Life Insurance sector The market share for FY 2005-06was 71441048766 Kotak Mahindra OLD Mutual -Projects Thesis Dissertation ndash projectsparadisecom 69Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company Thecompany was registered on 1012001 The market share for FY 2005-06was 1111048766 Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company wasregistered on 682001 The market share for FY 2005-06 was 1231048766 Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on1452002 The market share for FY 2005-06 was 1141048766 ING Vysya Life insurance -ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is aprivate sector company The company was registered on 282001 Themarket share for FY 2005-06 is 0791048766 Met Life India -Projects Thesis Dissertation ndash projectsparadisecom 70Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sectorcompany The company was registered on 682001 The market share forFY 2005-06 was 0401048766 Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Jointventure between Bajaj Auto limited and Allianz AIG The company was
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
registered on 382001 The market share for FY 2005-06 was 7561048766 SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is aprivate sector company The market share for FY 2005-06 was 2311048766 The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG Itbelongs to the private sector The company was registered on 1222001 Themarket share for FY 2005-06 was 1291048766 Sahara India Life Insurance Company Ltd -Projects Thesis Dissertation ndash projectsparadisecom 71First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The marketshare for FY 2005-06 was 006 1048766 Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 joint venture between the Shriram group through its ShriramFinancial Holdings and Sanlam Life Insurance Limited South Africa Thecompany expects to start operations soon2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 287Projects Thesis Dissertation ndash projectsparadisecom 725 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 079
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
12 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003Now letrsquos depict the market share of these players on diagramProjects Thesis Dissertation ndash projectsparadisecom 73Market Share()1LIC2 Bajaj A llianz3 ICICI Prudential4 HDFC Standard5 SBI Life6 Birla SunLife7 Tata AIG8 M ax New York9 Aviva10 Kotak M ahindra OLDMutual11ING Vysya12 Reliance Life13 M etLife14 Sahara Life15 Shriram Life
Here we can see from the diagram that LIC is the market leader and itcommands the major part of the total life insurance market Its market sharewas approximately 98 before 2000 but after the entry of private players ithas significantly decreasedAmong private players Bajaj Allianz stands first It has the market share ofapproximately 756 in the total market and it constitutes 40 of the marketshare among private playersHDFC Standard comes third SBI Life insurance Company Limited comesfourth ICICI Prudential is also one of the fastest growing life insurancecompanies in IndiaRest of the players has market share below 2Projects Thesis Dissertation ndash projectsparadisecom 743) Capital Fund -Capital Fund of Private Companies( Rs in Crore )ICICI Prudential 375Max New York 250HDFC Standard 218
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Bajaj Allianz 200Tata AIG 183Birla Sun Life 180AVIVA 155OM Kotak 153Reliance Life 126SBI Life 125Met Life 110ING Vysya 110Projects Thesis Dissertation ndash projectsparadisecom 75
CHAPTER ndash 6RESEARCH METHODOLOGYProjects Thesis Dissertation ndash projectsparadisecom 76
61 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospectsface to face2) To improve our ability to sell a financial product like lifeinsuranceProjects Thesis Dissertation ndash projectsparadisecom 773) To know the perception of the consumer about life insurance4) To get a deep knowledge of the financial product like insurance5) To get some information about the market share of Reliance LifeInsurance as compared to the giants like LIC and to know thestanding of the company in the market62 QUESTIONNAIREIt is most common instrument whether administered in personby phone or online questionnaires are very flexible The form of eachquestion is also important Closed end question include all the possibleanswers and subjects matters choices among themI have used open-end questions so that customers can writeanswer in their own wordsI have also used closed-end questions which provideanswers that are easier to interpret and tabulate I have taken care in the
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
wording and ordering of questions I have used simple direct unbiasedwording questions which are arranged in a logical order I have askedpersonal questions at last so that respondent does not become defensiveProjects Thesis Dissertation ndash projectsparadisecom 781048766 Questionnaire of the customerI have made questionnaire consisting seventeen questions toget customerrsquos view about life insurance I have asked personal questionsat last so that they do not become defensive I have tried to know theirperformance ie whether they want to invest where thy want to investup to what amount and since when63 SAMPLING METHOD AND SAMPLE SIZE1048766 Introduction-Any organization whether big or small private or public needdifferent types of information are to know its popularity I have gatheredsecondary data and primary data and collected information from thecombination of these two data1048766 Secondary data -Secondary data consist of information that already exists somewherehaving been collected for another purpose I have gathered secondary datafrom website of different operators different magazines newspapers andlibraries1048766 Primary data -Projects Thesis Dissertation ndash projectsparadisecom 79I have taken great care while collecting primary data to answer that it isrelevant accurate current and unbiased I have taken a sample of 50 peopleI have visited them personally to get data
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
1048766 Sample size -I have taken sample size of 50 respondents Because the population is toolarge so it is difficult to survey64 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe following are the limitation of this research studyProjects Thesis Dissertation ndash projectsparadisecom 801) The sample size of 50 might not represent the perception of wholepopulation as the sample size is too small for total population ofAhmedabad city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that Iam not trained for the research study and this is my first study Itried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more timethen studies will be more effectiveThere are some limitations of this study But in spite of their limitation Iworked with the enthusiasm And I tried to give the best results to theresearch of this report65 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for lifeinsurance What is peoplersquos major motive behind investing in life insuranceDo they decide upon their own or they take guidance of an agent What istheir perception about Reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 811048766 Questions-There are 7 questions in the questionnaire Out of these 7 questions 6
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
questions are close ended and one question is an open ended one1048766 Target Population-I had conducted this survey among 50 people and the target group was amix of people from the society I asked the questions to DoctorsProfessionals Professors Advocates Engineers and general public1048766 Analysis-I have used pie charts and some other statistical measures to analyze thequestionsQ1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYieldProjects Thesis Dissertation ndash projectsparadisecom 82There could be any motive ofpeople behind investing in alife insurance policy The mainpurpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of alife insurance policy Some people consider Tax benefit as the mainadvantage of life insurance Some believe that life insurance is aninvestment so they tend to invest in life insurance While some peoplebelieve that it is a compulsory saving Now letrsquos see what all people sayTAXSAVINGRISKCOVERAGERETURNYIELD
MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 83Here we can see that majority of the people tend to invest in life insurancefor the risk coverage The next preferred option is Tax Saving We foundedfrom the discussion with public and some experts that those people with alow income tend to invest in life insurance to gain tax benefitSaving motive constitutes very small part of the total sample Return comeslastBut this is the general conclusion of 50 people If we take a larger samplewe can get a different resultAs the private players have launched ULIPs more and more people areturning towards these products so the Investment motive has been gainingcommand Also the number of those people who wish to invest for return isalso increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is forprotection first then for Savings and Tax benefits all those thingsQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1 21 3 24 12 19 11 16 43 8 25 7 104 2 11 3 35Projects Thesis Dissertation ndash projectsparadisecom 840 510152025303540
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Preference1234TAX BENEFITSAVINGSRISK COVERRETURNYIELD
We can see from the table and the graph that the number one motive ofpeople about investing in life insurance is risk coverage which is the maintheme of life insurance followed by Tax benefit The third position is ofsaving and fourth is Return This shows that still people consider otherfinancial tools more viable for return and life insurance is for Tax benefitand risk coverQ3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentThis is a very crucial question as most of the people are not much familiarabout different life insurance plans offered by different life insuranceProjects Thesis Dissertation ndash projectsparadisecom 85companies so people take help of the life insurance agent and as he guidesunderstanding the needs of the individual people would investHere one hazardous factor is the moral hazard People tend to invest in lifeinsurance plans to maintain relations though they are not in need of lifeinsuranceAlso sometimes it depends upon the convincing power of the agentON MY OWNFAMILYDECISION
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
EMPLOYERDECIDESAGENTGUIDANCE
Here we can see that majority people (58) decides on their about investingin life insurance 28 persons decides as per the guidance of the agentSOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 86There is no contribution of employers in the decision of onersquos investment inlife insurance 14 people invest in life insurance as per the family decisionQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedThis is another crucial question as there are number of products offered bylife insurance companies The products range from pure Term AssurancePlans to Unit Linked Insurance Plans which are relatively new entrant in themarketWe have already explained all these policies aheadNow letrsquos find out what people have to sayType of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Projects Thesis Dissertation ndash projectsparadisecom 87TermAssuranceWhole LifeEndowmentCombinedULIPs
As it is evident from the chart and the table 38 people prefer combinationof Whole Life and Endowment product It gives people double advantageThe person would get some amount at the end of the stipulated period forinstance 20 years and after that period the risk cover continues and the restof the amount would be paid when the person diesQ5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LICThis is the most important question as it reflects the scope of the study It isthe main theme of this questionnaireProjects Thesis Dissertation ndash projectsparadisecom 88Prior to 2000 LIC was the only player in the life insurance market and it hadthe total market So people had to go to LIC for buying life insurance policyBut after the entry of private players in 2000 some people have also turnedto private life insurersReliance Life Insurance Company Limited is newly launched company So ithas fewer customers as compared to LIC But the ULIP plans are sold moreof Reliance life insurance as compared to LIC in todayrsquos environmentNow letrsquos see what people sayReliance LifeInsuranceLIC
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
As evident from the chart that 30 of people would prefer Reliance LifeInsurance while 70 would prefer LICParticulars NoReliance Life Insurance 15LIC 35TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 89
1048766 Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 9018 to 3031 to 5051 to 65
As evident from the chart that I have taken a sample of 50 Out ofwhich 10 people are aged between 18 to 30 60 people are aged between31 to 50 and remaining 30 people are aged between 51 to 652) Occupation(a) Service(b) Business(c) Profession(d) Housewife(e) RetiredOccupation NoProjects Thesis Dissertation ndash projectsparadisecom 91Service 5Business 15Profession 10Housewife 5Retired 15TOTAL 50Service
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
BusinessProfessionHousewifeRetired
As the evident from the chart that out of 50 respondents 10 are of servicemen 30 are of business men 20 are of professions 10 are ofhousewives and remaining 30 are of retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000Projects Thesis Dissertation ndash projectsparadisecom 9250000 to100000100000 to500000More than500000
As the evident from the chart out of 50 respondents 20 are earningannually between 50000 to 100000 50 are earning between 100000 to500000 and 30 are earning more than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50Projects Thesis Dissertation ndash projectsparadisecom 93Family Members No2 53 154 20More than 4 10TOTAL 502
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
34More than 4
As the evident from the chart out of 50 respondents 10 have 2 familymembers 30 have 3 family members 40 have 4 family members andremaining 20 have more than 4 family members66 SWOT ANALYSISSWOT analysis is the analysis of the internal and external factors whichhave impact on the survival of any organization Now letrsquos make SWOTanalysis for reliance Life Insurance Company LimitedProjects Thesis Dissertation ndash projectsparadisecom 94STRENGTHS1) Reliance Life Insurance Company Limited is the part of theReliance Capital2) The brand name is enough to sell the products easily3) Private placement of Rs 10000 crs worth of securities with RBIby the government Led to an improvement in market securities4) Strong liquidity from FII was the major reason for the up move5) Range of products6) Reliance has a long and strong history of solvency financialstabilityWEAKNESSES1) Newly established company so people seems it risky2) Lack of staffProjects Thesis Dissertation ndash projectsparadisecom 953) Lack of advertisement so most of the customers are not awareof the Reliance Life Insurance OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurancepremium the people who used to invest in life insurance for thesole motive of tax benefit may turn to other instruments
CHAPTER ndash 7FINANCE DEPARTMENTProjects Thesis Dissertation ndash projectsparadisecom 96
1048766 FUND PERFORMANCE-There are four fund options which Reliance Life InsuranceCompany Limited has offered which are as followsProjects Thesis Dissertation ndash projectsparadisecom 971) Capital Secure Fund-This fund is for Reliance Golden Years Plan and RelianceMarket Return PlanIn line with the objective of protecting the capital against any erosion 614of the funds were invested in short-term Government Securities (Gilts) andto meet liquidity requirement higher about 40 of funds are kept in shortterm bank deposits The net return credited to policyholders and the assetcomposition ratios are given in the boxes belowNet Returns during last 1 month (Marrsquo06) 036Net Returns during the last 3 months (Jan-Marrsquo06) 110Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 409Net Returns since Inception in Febrsquo03 (Annualized) 389Bank Fixed DepositsAsset Name of total assetsTotal Bank Deposit 3860Gilts675 GOI 2006 6751168 GOI 2006 13691175 GOI 2006 4096Projects Thesis Dissertation ndash projectsparadisecom 98Total Gilts 6140
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Total 100001048766 Asset Allocation-GiltsBank Deposits
2) Balanced Fund-This fund is for Reliance Golden Years Plan and Reliance MarketReturn PlanTo take advantage of the bullish trend in the equity market theequity holdings in the fund was maintained as close as possible to themaximum of 20 allowed for the fund Bank deposits were maintained onlyfor the purpose of liquidity management To reflect their bearish view on thedebt market the duration of the fixed income portfolio was kept low Withinthe fixed income portfolio allocation to Gilts was higher than corporatebonds All the bonds in the portfolio are top rated The asset compositionthe details of the portfolio and the net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 247Projects Thesis Dissertation ndash projectsparadisecom 99Net Returns during the last 3 months (Jan-Marrsquo06) 407Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 1383Net Returns since Inception in Febrsquo03 (Annualized) 1310Asset Name of Total AssetEquity 20Corporate Bonds amp Debentures 22Gilts 53Bank Deposits 5Total 10000EquityCorporate Bondsamp DebenturesGiltsBank Deposits
3) Growth Fund-Projects Thesis Dissertation ndash projectsparadisecom 100This fund is for Reliance Golden Years Plan and Reliance MarketReturn Plan
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
To take advantage of the bullish trend in the equity market the equityholdings in the fund was maintained as close as possible to the maximum of20 allowed for the fund To reflect their bearish view on the debt marketthe duration of the fixed income portfolio was kept low All the bonds in theportfolio are top rated The asset composition the details of the portfolio andthe net returns are disclosed belowNet Returns during last 1 month (Marrsquo06) 460Net Returns during the last 3 months (Jan-Marrsquo06) 799Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 2490Net Returns since Inception in Febrsquo03 (Annualized) 2104Asset Name of Total AssetEquity 9Corporate Bonds amp Debentures 40Gilts 45Bank Deposits 6Total 10000Projects Thesis Dissertation ndash projectsparadisecom 101EquityCorporate Bondsamp DebenturesGiltsBank Deposits
4) Equity Fund-This fund is for Reliance Market Return Plan In line with thestated asset allocation pattern and their view of the market the entire corpusof the fund was invested in equities Net returns earned since inception andthe full portfolio are disclosed belowNet Returns during last 1 month (Marrsquo06) 1118Net Returns during the last 3 months (Jan-Marrsquo06) 2002Net Returns during the last 12 months (Aprrsquo05-Marrsquo06) 6446Net Returns since Inception in Febrsquo03 (Annualized) 5783Projects Thesis Dissertation ndash projectsparadisecom 102Asset Name of Total AssetEquity 9893
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
Mutual FundBank Deposits 107Total 10000EquityMutual FundBankDeposits
CHAPTER ndash 8Projects Thesis Dissertation ndash projectsparadisecom 103
CONCUSION1048766 After the deep study of insurance sector of India I can tell that this isthe sector which has most business opportunities perhaps in IndiaProjects Thesis Dissertation ndash projectsparadisecom 1041048766 Insurance industry is one of the fastest sectors in India Insurancesector has been growing by 25 to 30 and it is expected to increaseby 50 in coming 5 years After the opening up of the insurancesector it has become much competitive and insurance awarenessamong people has increased1048766 As far as the comparison of Reliance Life Insurance and other playersis concerned there are both positive as well as negative impacts onboth the sides1048766 For Reliance Life Insurance the negative aspect is that its marketshare is low1048766 For private players the negative aspect is that they have to fight withthe public sector giant which is established player with a high brandvalue1048766 But the positive impact is that the life insurance awareness hasincreased and the business of Reliance Life Insurance has increased
CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCESProjects Thesis Dissertation ndash projectsparadisecom 105
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
1048766 wwwreliancelifecom1048766 wwwindiainfolinecom1048766 wwwbimaonlinecom1048766 wwwgooglecomProjects Thesis Dissertation ndash projectsparadisecom 1061048766 Life Time Magazine of Reliance Life Insurance1048766 Net Bios Computer Academyrsquos Life Insurance Book1048766 Broachers of Reliance Life Insurance
CHAPTER ndash 10ANNEXUREProjects Thesis Dissertation ndash projectsparadisecom 1071048766 QuestionnaireSurvey by student of RKCBMOnLife InsuranceNAME ___________________________________________Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk CoverProjects Thesis Dissertation ndash projectsparadisecom 108(d) ReturnYieldQ2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENTTAX BENEFIT SAVINGS RISK COVER RETURNYIELDPreference1234Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agentQ4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment(e) Unit LinkedQ5 Would you prefer Reliance Life Insurance or LIC for buying the
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
life insurance policy(a) Reliance Life Insurance(b) LICProjects Thesis Dissertation ndash projectsparadisecom 109
PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) BusinessProjects Thesis Dissertation ndash projectsparadisecom 110(c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than 4
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