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10/14/2014 
Create By | Mujeeb Rehman SUMMER TRAINING REPORT 
CUSTOMER SATISFACTION IN BIRLA SUN LIFE INSURANCE
1 | P a g e 
LACHOO MEMORIAL COLLEGE OF SCIENCE AND TECHNOLOGY 
(AUTONOMOUS) 
Affiliated To Jai Narain Vyas University, Jo...
2 | P a g e 
Acknowledgement 
I take this opportunity to express my knowledge and deep sense of gratitude for rendering va...
3 | P a g e 
Preface 
To achieve partial and concrete results, it is necessary that theoretical knowledge must be suppleme...
4 | P a g e 
Executive Summary 
The BBA course has its own unique syllabus which require its students to undertake any int...
5 | P a g e 
Index 
Chapter Page no. 
1. Introduction of Insurance 06 
2. Insurance in India 14 
3. Company Profile 25 
4....
6 | P a g e 
Chapter 1 - Introduction of Insurance 
Life insurance Life insurance or life assurance is a contract between ...
7 | P a g e 
Most contracts have a contestability period, also usually a two-year period; if the insured dies within this ...
8 | P a g e 
policy owner and invests them to create a pool of money from which to pay claims, and finance the insurance c...
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person who would otherwise be in the Preferred Best category will be denied a policy if he or she travels to ...
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1. The objects to be insured must be numerous enough and homogeneous enough to allow a reasonably close calc...
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Nature of Insurance 
Sharing of risk 
Insurance is a device to share the financial losses which might be fal...
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Purpose of Insurance 
1. Insurance spreads the economic burden of losses by using funds contributed by membe...
13 | P a g e 
3. Provide certainty: Insurance is a device, which helps to change from uncertainties to certain. Insurance ...
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Chapter 2 - Insurance in India 
The insurance sector in India has a full circle from being an open competiti...
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 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance busine...
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 Postal Life Insurance should be allowed to operate in the rural market  Only one State Level Life Insuran...
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performance and enable them to act as independent companies with economic motives. For this purpose, it had ...
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 ING- Vysya  TATA- AIG Life  Birla- Sun life  Om Kotak Life  AvivaMet Life  AMP Sammar  SBI Life The ...
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Life Insurers:  Life Insurance Corporation of India (LIC): Popular Products: Endowment Assurance (Participa...
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General Insurers 
 Royal Sundaram Alliance Insurance Company Limited. 
 IFFCO Tokyo General Insurance Comp...
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Besides buying insurance early in life is one of the wise decisions you could take. Because the premium you ...
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By taking a policy early in life you not only benefit in forking out a lower premium amount but also make a ...
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Costs of Education Most families start planning for their child's future education costs as soon as he clear...
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Continuity & Security of Interests At times after an individual's death, his family might have to sacrifice ...
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Chapter 3 - Company Profile 
BIRLA SUN LIFE = ADITYA BIRLA GROUP (INDIA) + SUN LIFE FINANCIAL’S (CANADA) 
In...
26 | P a g e 
Sun life financial Sun Life Financial is a leading international financial services organization providing a...
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Birla Sun Life Insurance 
Birla Sun Life Insurance Co. Ltd. is a joint venture between Aditya Birla Group, a...
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Mission 
To be the first preference of our customers by providing innovative, need based life insurance and ...
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Location of Birla Sun Life Insurance
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Birla Sun Life Insurance Achievements 
In the "Great Places to Work - 2006 Survey", Birla Sun Life Insurance...
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The Indo-Canadian Business Chamber- BSLI awarded for its 'Successful Performance' for 4 years April 2005. 
B...
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Key Peoples of Organisation 
Board of Directors 
1. Mr.Kumar M Birla 2. Mr. Donald A Stewart, 3. Mr. Bishwan...
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13. Mr. K.H. Venkatachalam Vice President - Human Resource 14. Mr. LalitVermaoi Vice President - Compliance ...
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Chapter 4 - Product Profile 
Insurance Plans 
Life is unpredictable. But in face of adversity, our responsib...
35 | P a g e 
Level Term Assurance without return of premium 
 On death the entire sum assured will be paid. 
 No surviv...
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 Additional credits payable as a percentage of the initial annual premium are paid along with the death or ...
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The key features of the plan are: 
 Flexibility to choose a specific level of protection (Sum Assured), bas...
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 You can also enhance your policy by adding Accident & Disability Benefit Rider, Waiver of Premium Rider an...
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 The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) ...
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Life Time 
 Presenting Life Time – unit –linked plans that meet your changing needs over a lifetime. 
 The...
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Investment 
 Choose from among four funds, based on your investment objective and risk appetite. 
 Choice ...
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Cash Plus 
 An insurance plan that gives you added protection, savings, multiple options, plus the power of...
43 | P a g e 
Child Plan 
As a responsible parent, you will always strive to ensure a hassle-free, successful life for you...
44 | P a g e 
Life Link II is a unique plan that combines the security of a life insurance policy with the opportunity of ...
45 | P a g e 
To ensure a comfortable retired life, you would be wise to invest money into additional avenues like pension...
46 | P a g e 
the beneficiary nominated by the member. It is a one-year renewable policy where one master policy covers al...
47 | P a g e 
 Low explicit charge structure with the conditions for exit specified upfront. 
 Enhanced service levels t...
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 Control - Each member/employer can exercise greater control over investments by choosing one or more of th...
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BSLI offers the following features: 
Life Cover Savings 
Age at entry 18 - 45 Yrs. 
Premium Mode Half Yearly...
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Chapter 5 - Indian Regulatory Development Authority (IRDA) 
IRDA: The insurance sector has been opened up in...
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viewed in the light to some recent issues that have been raised regarding as to what constitutes the rural m...
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At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The gov...
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Chapter 6 - Research Methodology “The research design is the conceptual structure with in which research is ...
54 | P a g e 
2. Secondary data: Data, which have already been collected by someone else and hence passed through the stat...
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Population: 1. Sampling Unit: Comparative Study between Birla Sun life & Other Insurance Companies 
2. Sampl...
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Chapter 7 - Scope & Importance of Study 
To determine and analyzed the Market Potential of the Birla Sun Lif...
57 | P a g e 
Chapter 8 - Review Of Literature 
Here in review of literature I studied the role of relationship marketing ...
58 | P a g e 
business in India. It is also attempted to examine the growth of Indian insurance sector during the period o...
59 | P a g e 
unique to insurance companies. Furthermore, the insurance market is both mature and efficient (i.e. its leve...
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dependency ratio However, dearth of new products represents a major implication. 
I studied the concept of b...
61 | P a g e 
Studied the impact of customers’ perception of customer service (bad/good) on variables that are known to dr...
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Chapter 9 - Finding & Analysis (Q & A) Question 1: Given a choice you would prefer to invest in? S.No. Inves...
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Question 2: How much of your income would you like to invest in insurance annually? S.No. 1 2 3 4 Income gro...
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Question 3: While taking insurance plan how you rate the following? S.No. Purpose of Insurance Percentage 1 ...
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Question 4: In future, which life insurance plans you will prefer? S.No. 1 2 3 4 5 PLANS Pension Plan Protec...
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Question 5: Percentage of People Having Life Insurance Policy? Sample size – 100 Interpretation: The above d...
67 | P a g e 
Question 6: Which Birla Sun Life Scheme do you have? S. No. 1 2 3 Plan Health Retirement Life Percentage 10%...
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Question 7: Is the plan of Birla Sun Life attracts the Investor? Option Percentage Yes 72 No 28 
Interpretat...
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Question 8: Are you satisfied with the services provided by the company regarding new plans and schemes? Opt...
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Question 9: Are you interested to make more investments in BSLI? Option Percentage Yes 67 No 33 
Interpretat...
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Question 10: Have you any other Insurance Plan apart from BSLI? Option Percentage Yes 72 No 28 
Interpretati...
72 | P a g e 
Question 11: If yes, then of which Life Insurance Company? S. No. 1 2 3 4 5 Company LIC BSLI BAJAJ ALLIANZ I...
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Question 12: If you get any attractive plan than are you ready to switch over? Option Percentage Yes 82 No 1...
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Question 13: Percentage Of People Insured With Different Companies? S.No. COMPANIES PERCENTAGE 1 LIC 72.5% 2...
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This is the brief document about Birla Sun Life Group..which include almost all its insurance plans, and policies. This documents also help those students and people how are seeking to get to know about BSLI. I provide all the detailed history about birla group in this documents..:)

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Birla Sun Life Insurance

  1. 1. 10/14/2014 Create By | Mujeeb Rehman SUMMER TRAINING REPORT CUSTOMER SATISFACTION IN BIRLA SUN LIFE INSURANCE
  2. 2. 1 | P a g e LACHOO MEMORIAL COLLEGE OF SCIENCE AND TECHNOLOGY (AUTONOMOUS) Affiliated To Jai Narain Vyas University, Jodhpur Faculty of Management Studies A SUMMER TRAINING PROJECT REPORT ON “CUSTOMER SATISFACTION IN BIRLA SUN LIFE INSURANCE” Submitted under partial fulfilment of BBA 5th SEM. Session 2014-15 Submitted to: Submitted by: Dr. Akhil Mathur Mujeeb Rehman Asst. Prof. BBA 5th SEM.
  3. 3. 2 | P a g e Acknowledgement I take this opportunity to express my knowledge and deep sense of gratitude for rendering valuable assistance and guidance to me by following personality for successful completion of my project. I am highly obliged to my project guide Mohammed Nadeem Ahmed for his personal encouragement prompt territory manager and help provided to me in completion of my project. He has helped me a lot by giving suggestion guidance whenever needed. His contribution has been extremely useful and is greatly appreciated. I honour his knowledge and competence in the field of management. Sincerely, Ikram Ali
  4. 4. 3 | P a g e Preface To achieve partial and concrete results, it is necessary that theoretical knowledge must be supplemented with practical environment. Keeping that view in mind I have completed my training work regarding ‘customer satisfaction in Birla sun life insurance Company’. By doing the research work I have learnt a lot of things which would be really helpful for me in future. The experience in decisions making and practical application of knowledge has contributed greatly to my growth. Mujeeb Rehman
  5. 5. 4 | P a g e Executive Summary The BBA course has its own unique syllabus which require its students to undertake any internship with any of the leading business houses for a period ranging from 4-6 weeks at the end of the fifth semester, the purpose of this internship is to enable the students to appreciate and understand the nuances of practical world vis-à-vis the theoretical input administered during regular academic session. This help in creating managers who are well equipped with the experience of linking the theoretical inputs with those of practical environment in partial fulfilment of BBA degree. I was given a project on ‘Customer satisfaction in Birla sun life insurance Company’. I have learned a lot regarding the working of banks related to monitoring and noticed various problems which they face and are still facing during mentoring period; it was really great working with this prestigious organization of Birla sun life insurance.
  6. 6. 5 | P a g e Index Chapter Page no. 1. Introduction of Insurance 06 2. Insurance in India 14 3. Company Profile 25 4. Product Profile 34 5. Indian Regulatory Development Authority (IRDA) 50 6. Research Methodology 53 7. Scope & Importance of Study 56 8. Review of Literature 57 9. Finding & Analysis (Q & A) 62 10. Conclusion 77 11. Suggestions 78 12. SWOT Analysis 81 13. Bibliography 83 14. Questionnaire 84
  7. 7. 6 | P a g e Chapter 1 - Introduction of Insurance Life insurance Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. In the United States, the predominant form simply specifies a lump sum to be paid on the insured's demise. Life insurance is a type of insurance. As in all insurance, the insured transfers a risk to the insurer. The insured pays a premium and receives a policy in exchange. The risk assumed by the insurer is the risk of death of the insured. How life insurance works There are three parties in a life insurance transaction; the insurer, the insured, and the owner of the policy (policyholder), although the owner and the insured are often the same person. For example, if John Smith buys a policy on his own life, he is both the owner and the insured. But if Mary Smith, his wife, buys a policy on John's life, she is the owner and he is the insured. The owner of the policy is called the grantee (he or she will be the person who will pay for the policy). Another important person involved is the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value. The policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk assumed. Special provisions apply, including a suicide clause wherein the policy becomes null if the insured commits suicide within a specified time for the policy date (usually two years). Any misrepresentation by the owner or insured on the application is also grounds .
  8. 8. 7 | P a g e Most contracts have a contestability period, also usually a two-year period; if the insured dies within this period, the insurer has a legal right to contest the claim and request additional information before deciding to pay or deny the claim. The face amount of the policy is normally the amount paid when the policy matures, although policies can provide for greater or lesser amounts. The policy matures when the insured dies or reaches a specified age. The most common reason to buy a life insurance policy is to protect the financial interests of the owner of the policy in the event of the insured's demise. The insurance proceeds would pay for funeral and other death costs or be invested to provide income replacing the deceased's wages. Other reasons include estate planning and retirement. The owner (if not the insured) must have an insurable interest in the insured, i.e. a legitimate reason for insuring another person’s life. The insurer (the life insurance company) calculates the policy prices with intent to recover claims to be paid and administrative costs, and to make a profit. The cost of insurance is determined using mortality tables calculated by actuaries. Actuaries are professionals who use actuarial science which is based in mathematics (primarily probability and statistics). Mortality tables are statistically based tables showing average life expectancies. The three main variables in a mortality table are age, gender, and use of tobacco. The mortality tables provide a baseline for the cost of insurance. In practice, these mortality tables are used in conjunction with the health and family history of the individual applying for a policy in order to determine premiums and insurability. The current mortality table being used by life insurance companies in the United States and their regulators was calculated during the 1980s. There is currently a measure being pushed to update the mortality tables by 2008. The current mortality table assumes that roughly 2 in 1,000 people aged 25 will die during the term of coverage. This number raises roughly quadratic ally to about 25 in 1,000 people for those aged 65. So in a group of one thousand 25 year old males with a $100,000 policy, a life insurance company would have to, at the minimum, collect $200 a year from each of the thousand people to cover the expected claims. The insurance company receives the premiums from the
  9. 9. 8 | P a g e policy owner and invests them to create a pool of money from which to pay claims, and finance the insurance company's operations. Contrary to popular belief, the majority of the money that insurance companies make comes directly from premiums paid, as money gained through investment of premiums will never, in even the most ideal market conditions, vest enough money per year to pay out claims. Rates charged for life insurance increase with the insured's age because, statistically, a people are more likely to die as they get older. Since adverse selection can have a negative impact on the financial results of the insurer, the insurer investigates each proposed insured (unless the policy is below a company-established minimum amount) beginning with the application, which becomes part of the policy. Group Insurance policies are an exception. This investigation and resulting evaluation of the risk is called underwriting. Health and lifestyle questions are asked, and the answers are dutifully recorded. Certain responses by the insured will be given further investigation. Life insurance companies in the United States support The Medical Information Bureau, which is a clearinghouse of medical information on all persons who have ever applied for life insurance. As part of the application, the insurer receives permission to obtain information from the proposed insured's physicians. Life insurance companies are never required by law to underwrite or to provide coverage on anyone. They alone determine insurability, and some people, for their own health or lifestyle reasons, are uninsurable. The policy can be declined (turned down) or rated. Rating means increasing the premiums to provide for additional risks relative to that particular insured. Many companies use four general health categories for those evaluated for a life insurance policy. These categories are Preferred Best, Preferred, Standard, and Tobacco. Preferred Best means that the proposed insured has no adverse medical history is not under medication for any condition, and his family (immediate and extended) has no history of early cancer, diabetes, or other conditions. Preferred is like Preferred Best, but it allows that the proposed insured is currently under medication for the condition and may have some family history. Most people are in the Standard category. Profession, travel, and lifestyle also factor into not only which category the proposed insured falls, but also whether the proposed insured will be denied a policy. For example, a
  10. 10. 9 | P a g e person who would otherwise be in the Preferred Best category will be denied a policy if he or she travels to a high risk country. Upon the death of the insured, the insurer will require acceptable proof of death before paying the claim. The normal minimum proof is a death certificate and the insurer's claim form completed, signed, and often notarized. If the insured's death was suspicious and the policy amount warrants it, the insurer may investigate the circumstances surrounding the death, before deciding whether there is a legal obligation to pay the claim. Proceeds from the policy may be paid in a lump sum or as an annuity paid over time in regular recurring payments for either for the life of a specified person or a specified time period. What is Insurance? Insurance is a contract for reducing losses from accident incurred by an individual party through a distribution of the risk of such losses among a number of parties. It is a system under which the insurer, for a consideration usually agreed upon in advance, promises to reimburse the insured or to render services to the insured in the event that certain accidental occurrences result in losses during a given period. It thus is a method of coping with risk. Its primary function is to substitute certainty for uncertainty as regards the economic cost of loss-producing events is concerned. Thus, In return for a specified consideration, the insurer undertakes to pay the insured or his beneficiary some specified amount in the event that the insured suffers loss through the occurrence of a contingent event covered by the insurance contract or policy. By pooling both the financial contributions and the "insurable risks" of a large number of policyholders, the insurer is typically able to absorb losses incurred over any given period much more easily than would the uninsured individual. Insurance relies heavily on the "law of large numbers." In large homogeneous populations it is possible to estimate the normal frequency of common events such as deaths and accidents. Losses can be predicted with reasonable accuracy, and this accuracy increases as the size of the group expands. From a theoretical standpoint, it is possible to eliminate all pure risk if an infinitely large group is selected. The risks must be such that pooling is both feasible and advantages to the two parties. From the standpoint of the insurer, an insurable risk must meet the following requirements:
  11. 11. 10 | P a g e 1. The objects to be insured must be numerous enough and homogeneous enough to allow a reasonably close calculation of the probable Frequency and severity of loses. 2. The insured objects must not be subject to simultaneous destruction. For example, if all the buildings insured by one insurer are in an area subject to flood, and a flood occurs, the loss to the insurance underwriter may be catastrophic. 3. The possible loss must be accidental in nature, and beyond the control of insured. If the insured could cause the loss, the element of randomness and predictability would be destroyed. 4. There must be some way to determine whether a loss has occurred and how great that loss is. This is why insurance contracts specify very definitely what events must take place, what constitutes loss, and how it is to be measured. From the viewpoint of the insured person, an insurable risk is one for which the probability of loss is not so high as to require excessive premiums. What is "excessive" depends on individual circumstances, including the insured's attitude toward risk. At the same time, the potential loss must be severe enough to cause financial hardship if it is not insured against. Insurable risks include: Losses to property resulting from fire, explosion, windstorm, etc. Losses of life or health; and the legal liability arising out of use of automobiles, Occupancy of buildings, employment, or manufacture. Uninsurable risks include: Losses resulting from price changes and competitive conditions in the market. Political risks such as war or currency debasement are usually not insurable by private parties but may be insurable by governmental institutions. Very often contracts can be drawn in such a way that an "uninsurable risk" can be turned into an "insurable" one through restrictions on losses, redefinitions of perils, or other methods.
  12. 12. 11 | P a g e Nature of Insurance Sharing of risk Insurance is a device to share the financial losses which might be fall on an individual or his family on tile happening of specified event. The event may be death, in case of life insurance, marine perils, marine insurance, fire in fire insurance and other certain events in general insurance. Co-operative Device The most important feature of every insurance plan is the co-operation of large number of persons who, agree to share the financial loss arising due to a particular risk which is insured. All co-operative devices, there is no compulsion here on anybody lo purchase the insurance policy. Value of risk The risk is evaluated before injuring the charge the amount of share of an insured, here is called, consideration or premium. if there is expectation of more loss, higher premium may be charged. So, the probability of loss is calculated at the lime of insurance. Payment at Contingency The payment is made at a certain Contingency insured. If the Contingency occurs, payment is made. Since the life insurance is a contract of certainty, because the contingency, the death or the expiry of term, will certainly occur the payment is certain. Amount of payment The amount of payment depends upon the value of loss occurred due to the particular insured risk provided insurance is there up to that amount. In case of life insurance, promises to pay a fixed Bum on the happening of an even. (Either death or the expiry of the term). Large number of insured persons The co-operation of a small number of persons may also be insurance but in that case, the cost of insurance to each number may be higher. In case of large number of persons opposite condition is applicable.
  13. 13. 12 | P a g e Purpose of Insurance 1. Insurance spreads the economic burden of losses by using funds contributed by members of the group to pay for them. Thus, it is a loss spreading device. 2. The fundamental purpose of insurance however is neither the spreading nor the prevention of losses. Rather, it is reduction of the uncertainly which is caused by awareness of the possibility of loss. 3. An insurance scheme provides certainty for the individual members of the group by averaging loss costs. The contribution made by the individual to the group is assumed on the basis of predictions, to be his/her share of losses suffered by the group. In exchange for this contribution, he/she is assured that the group will assume any losses that involve him/she. He/she transfers risk to the group and averages his loss costs thus, substituting certainty for uncertainty. He pays a certain premium instead of facing the uncertainty of the possibility of large loss. Function of Insurance The functions of insurance can be bifurcated into three parts: 1. Primary Functions 2. Secondary Functions 3. Other Functions The primary functions of insurance include the following: 1. Provide Protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. 2. Collective bearing of risk: Bearing of risk Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.
  14. 14. 13 | P a g e 3. Provide certainty: Insurance is a device, which helps to change from uncertainties to certain. Insurance is device whereby the uncertain risk may be made more certain. 4. Research and publicity: Insurers also spend money in research and publicity in creating risk consciousness amongst which has a far reaching effect on reduction in national waste. The secondary function of insurance includes the following: 1. Prevention of losses: Prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by the way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. 2. Small capital to cover large risks: Insurance relieves the businessman from security investment, by paying small amount of premium against larger risk and uncertainties. 3. Contribute towards the development of larger industries: Insurance provide development opportunities to those larger industries having more risks in their setting up. Even the financial institution may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. The other functions are: 1. Means of saving and investment. 2. Source of earning foreign exchange. 3. Risk free trade.
  15. 15. 14 | P a g e Chapter 2 - Insurance in India The insurance sector in India has a full circle from being an open competitive Market to nationalization and back to a liberalized market again. Tracing the Developments in the Indian insurance sector reveals the 360 degree turn witnessed over a Period of almost two centuries. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are:  1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.  1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.  1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.  1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,  1956, with a capital contribution of Rs. 5 core from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India  1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.  1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.
  16. 16. 15 | P a g e  1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. Insurance sector reforms In 1993, Malhotra Committee, headed by former Finance Secretary and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reform initiated in the financial sector. The reforms were aimed at “creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…”In 1994, the committee submitted the report and some of the key recommendations included: Structure  Government stake in the insurance Companies to be brought down to 50%  Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations  All the insurance companies should be given greater freedom to operate Competition  Private Companies with a minimum paid up capital of Rs.1bn should be allowed  to enter the industry No Company should deal in both Life and General Insurance through a single Entity  Foreign companies may be allowed to enter the industry in collaboration with the domestic companies
  17. 17. 16 | P a g e  Postal Life Insurance should be allowed to operate in the rural market  Only one State Level Life Insurance Company should be allowed to operate in Each state Regulatory Body  The Insurance Act should be changed  An Insurance Regulatory body should be set up.  Controller of Insurance (Currently a part from the Finance Ministry) should be Made independent Investments  Mandatory Investments of LIC Life Fund in government securities to be reduced From 75% to 50%  GIC and its subsidiaries are not to hold more than 5% in any company (There Current holdings to be brought down to this level over a period of time) Customer Service  LIC should pay interest on delays in payments beyond 30 days  Insurance companies must be encouraged to set up unit linked pension plans  Computerization of operations and updating of technology to be carried out in the insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 cores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their
  18. 18. 17 | P a g e performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body. The Insurance Regulatory and Development Authority Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the Insurance sector and in particular the life insurance companies were the launch of the IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible Regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered. Public Life Insurance Company is:  LIC There are 12 private life insurance companies and 1 public life insurance company. These are:  Allianz Bajaj  ICICI- Prudential  Max- New York Life  HDFC- Standard Life Insurance
  19. 19. 18 | P a g e  ING- Vysya  TATA- AIG Life  Birla- Sun life  Om Kotak Life  AvivaMet Life  AMP Sammar  SBI Life The Insurance Regulatory and Development Authority Act, 1999 To permit the private companies to enter the insurance market, the Government enacted the Insurance Regulatory and Development Authority Act 1999, which was passed by the parliament in December 1999. It received Presidential assent in January 2000. The authority is a ten member team consisting of a) A Chairman; b) Five whole-time members; c) Four part-time members. Financial Relations  It is mandatory for each and every company to have paid up capital of Rs 100 crore prior to grant of license.  85% of premium collected by any insurer has to be invested in the government approved i.e. Central government, state government and other approved infrastructure bonds and securities.  Although all private insurance companies can have a foreign partner to the extent of 26% in their equity, not a single rupee can be invested out of India i.e. in foreign investment. Now the foreign partner can have joint venture ship with 45%of equity.  An amount equal to 95% of profits generated every year has to be compulsorily distributed among policyholders as bonus.  A check n management expenses has been sought with a restriction that it cannot be more than 15% of the total earnings of the insurance company in a year.
  20. 20. 19 | P a g e Life Insurers:  Life Insurance Corporation of India (LIC): Popular Products: Endowment Assurance (Participating) and Money Back (Participating). More than 80% of the life insurance business is from these products.  General Insurance Corporation of India (GIC): Fire and Miscellaneous insurance businesses are predominant. Motor Vehicle insurance is compulsory.GIC had four subsidiary companies, namely with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies.  The Oriental Insurance Company Limited  The New India Assurance Company Limited  National Insurance Company Limited  United India Insurance Company Limited In year 2000-2001 some companies is entered in insurance sector. There are sixteen company is entered. Ten companies are entered in Life insurance and other six companies are entered in General Insurance. These companies are... Life Insurers  HDFC Standard Life Insurance Company Ltd.  Max New York Life Insurance Co. Ltd.  ICICI Prudential Life Insurance Company Ltd.  Kotak Mahindra Old Mutual Life Insurance Limited  Birla Sun Life Insurance Company Ltd.  Tata AIG Life Insurance Company Ltd.  SBI Life Insurance Company Limited  ING Vysya Life Insurance Company Private Limited  Bajaj Allianz Life Insurance Company Limited  Metlife India Insurance Company Pvt. Ltd.
  21. 21. 20 | P a g e General Insurers  Royal Sundaram Alliance Insurance Company Limited.  IFFCO Tokyo General Insurance Company. Ltd.  TATA AIG General Insurance Company Ltd.  Bajaj Allianz General Insurance Company Limited.  ICICI Lombard General Insurance Company Limited.  Reliance General Insurance Company Limited. Need For Life Insurance The need for life insurance comes from the need to safeguard our family. If you care for your family’s needs you will definitely consider insurance. Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co- existed in harmony, and a system in which a sense of financial security was always there as there were more earning members. Times have changed and the nuclear family has emerged. Apart from other pitfalls of a nuclear family, a high sense of insecurity is observed in it today besides, the family has shrunk. Needs are increasing with time and fulfilment of these needs is a big question mark. Insurance provides a sense of security to the income earner as also to the family. Buying insurance frees the individual from unnecessary financial burden that can otherwise make him spend sleepless nights. The individual has a sense of consolation that he has something to fall back on. Why life insurance? You think twice before taking the plunge into buying insurance. Is buying insurance a necessity now? Spending an 'extra' amount as premium at regular intervals where you do not see immediate benefits does not seem a necessity at the moment. Well you could be wrong. Buying Insurance cannot be compared with any other form of investment. Insurance gives you a lifelong benefit and the returns will definitely come but only when you need it the most i.e. at the right time.
  22. 22. 21 | P a g e Besides buying insurance early in life is one of the wise decisions you could take. Because the premium you would be paying would be comparatively lower. Most important of all it provides you with that unique sense of security that no other form of investment provides. It gives you a sense of financial support especially during that time of crisis irrespective of the fluctuations in the stock market. Insurance provides for your career goals right from your childhood years. If the earning member of the family is no more your child's educational needs will not suffer. In fact his higher education too will be provided for. You need not spend sleepless nights thinking about how to save for your child's marriage. Life Insurance will take care of that typical once-in-a-life-time spending on marriages. An accident or a disability may be devastating but an insurance policy can be of utmost support for the family during such times too. Besides it provides for additional benefits such as bonuses. You need not worry about your retirement years. The rising prices, taxes, and your lifestyle will be taken care of easily. And you can relax and spend your old age in comfort and peace. When is the right time to buy life insurance? Buying Life Insurance cannot ever be compared with other investment decisions since it is very much in contrast with those stock market investments where you wait for the right time to buy and sell. Neither is this like receiving tips on particular scrip doing well in the market and holding great future prospects. This is because the future is always uncertain. Just as buying insurance is a necessity so also buying insurance early in life is important too. With proper financial planning one can work out as to how much money an individual is entitled to after the end of a particular term. A policy that will fulfill your child's future educational needs would have to be timed appropriately so that he receives the policy amount at that time when he needs it the most.
  23. 23. 22 | P a g e By taking a policy early in life you not only benefit in forking out a lower premium amount but also make a wise decision as far as insuring risks to yourself and your family is concerned What is benefited for customer whether to invest in mutual funds or having insurance policies? I had also met the customers who are invested in Mutual Funds and also who are invested in Insurance sector to make the comparison. The proceeds accruing from Life Insurance policy can be utilized for: a) Final Expenses resulting from death b) Guaranteed maintenance of lifestyle c) Replacement of income d) Mortgage or liquidation payment e) Costs of education f) Estate and other taxes g) Continuity & security of interests h) Final expenses resulting from death After an individual's untimely death, his survivors and heirs are entrusted with the responsibility of conducting his last rites according to customs and traditions as propagated by religion. Almost all religious sects follow certain rules that need to bidden regardless of the social circumstances. Guaranteed maintenance of lifestyle As long as there is a steady and assured supply of income, an individual's family and dependents are able to keep a self-professed standard of living. The family's eating and drinking habits, entertainment and lifestyle expenses are maintained at a certain level during their earning member's lifespan. In case of the unexpected death of the earning member, his or her family will be hard-pressed in trying to arrange for funds that would assist them in maintaining the standard of living that they've grown accustomed to. After all, no one really likes to make sacrifices, despite their miniscule fiscal value.
  24. 24. 23 | P a g e Costs of Education Most families start planning for their child's future education costs as soon as he clears his kindergarten papers. After all, every parent wants his or her child to grow and become a professionally qualified engineer or physician or likewise. And this is a fairly mean task since year after year since capitation fees charged by even run-of-the-mill colleges come up to lakes of rupees. In case either of the child's guardians or parents happens to expire before the end of his education, there are chances that he will not be able to complete his education. Nothing aids an individual in his life as much as what he or she knows. In any case, every parent wants to plan for his children's future and security and to achieve success in this plan, it is vital that the guardian or parents uses insurance as a tool to plan for his children's future, regardless of his or her presence. In case of the demise of a parent, the proceeds from his or her insurance can be channelled into their dependent children's education fund. Estate and other Taxes Normally after a family member's death, his family or dependents are usually flooded with notices from creditors or taxation officers. At a time like this when the family is struggling to recover from such a severe shock, it might seem inhuman for them to be subjected to such humiliation. However in today's materialistic world, chivalry is no longer in demand. In case of an emergency, women and children rarely come first but Creditors always do. Not only is it prudent for any individual to clear his debts prior to his demise but it would also spare his or her family the shame of having to clear debts that they did not incur, at least directly. Since no one knows when his or her time may come, there is always a chance that the dependents will have to pay the existing dues regardless of their economic status. Thanks to insurance, all existing debts and taxes can be cleared from the proceeds in no time at all. And the dependent family will be spared from the ignominy of having to pay what they did not owe, in the first place.
  25. 25. 24 | P a g e Continuity & Security of Interests At times after an individual's death, his family might have to sacrifice their interests in business or investments to arrange for their expenses and maintain a decent standard of living. In extreme cases, the dependent spouse might also have to suffer and sacrifice everything the family owns in a desperate bid to maintain the family name and crest above everything else. After all, India is still a country where honour is regarded higher than life itself. Surely, making prudent investments in insurance from time to time can aid in averting such a disgraceful situation for any self-respecting individual's family. Only then will the family be able to maintain its standard of living prior to the demise of the head of the family. Obviously, the proceeds from insurance will help secure the family's status and position in society as well as maintain their socio-economic level in life. Thus insurance serves the perfect hedging tool for securing the interests of the family and maintaining the continuity of their interests.
  26. 26. 25 | P a g e Chapter 3 - Company Profile BIRLA SUN LIFE = ADITYA BIRLA GROUP (INDIA) + SUN LIFE FINANCIAL’S (CANADA) Introduction of Aditya Birla Group The Aditya Birla Group is India’s first truly multinational corporation, Global in vision, rooted in values; the group is driven by performance ethic pegged on value creation for its multiple stakeholders. A US$ 24 billion conglomerate, with a market capitalization of US$ 24 billion and in the league of Fortune 500, it is anchored by an extraordinary belonging to over 25 different nationalities. Over 50 percent of its revenues flow from its operations across the world. The Aditya Birla group is US$ 30 billion conglomerate which gets 60% of its revenues from outside India. The group is a major player in all the industry sectors it operates in. The Aditya Birla Group has been adjudged the best employer in India and among the top 20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007. The origins of the group lie in the conglomerate once held by one of India's foremost industrialists Mr. Ghanshyam Das Birla. The Group’s products and services offer distinctive solutions worldwide .Its 85 state-of-the-art manufacturing units and sect oral services span 20 countries – India, Thailand, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, USA, UK, Germany, Hungary, brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Korea. The group has been adjudged the best employer in India and among the top 20 in Asia by the Hewitt-Economic Times and Wall street journal Study 2007. In India the group holds a frontrunner position as:  India’s leading copper producer  A premier branded garments player  The second largest player in viscose filament yarn.  The second largest player in the collar alkali sector.  Among the top five mobile technology players  A leading player in Life insurance and asset management.
  27. 27. 26 | P a g e Sun life financial Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2007, the Sun Life Financial group of companies had total assets under management of CDN$446 billion. Birla Sun Life Promoted Companies Birla sun life asset management company ltd A collaboration of the US $ 8.3 Billion Adyta Birla group and the CDN $ 400 billion Sun life financial of Canada brings together global and Indian expertise to the area of financial services. Birla Sun Life Asset Management Company Ltd., the investment managers of Birla Mutual fund, is a joint venture between the Aditya Birla Group and the Sun Life Financial Services Inc. of India. The joint venture brings together the Aditya Birla Group’s experience in the Indian market and Sun Life’s global experience. Since its inception in 1994, Birla Mutual fund has emerged as one of India’s Leading Mutual Funds managing assets of a large investor’s base. The fund offers a range of investment options, which include diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds.
  28. 28. 27 | P a g e Birla Sun Life Insurance Birla Sun Life Insurance Co. Ltd. is a joint venture between Aditya Birla Group, an Indian multinational corporation, and Sun Life Financial Inc., a leading global insurance company. Birla Sun Life Insurance is distinguished as the first company in the sector of financial solutions to begin Business Continuity Plan. This insurance company has pioneered the unique Unit Linked Life Insurance Solutions in India. Within 4 years of its launch, BSLI became one of the leading players in the industry of Private Life Insurance Scheme. Birla Sun Life Insurance believes in passion, integrity, speed, commitment and seamlessness. The mission of the company is to help people with risk management. It also helps in managing the financial situation of firms as well as individuals. Here is given a comprehensive list of policies and products offered by Birla Sun Life Insurance Co. Ltd.?  Birla Sun Life Insurance pioneered the unique Unit Linked Insurance Solutions in India.  Within 4 years of its launch, BSLI has cemented its position as a leading player in the private life insurance industry.  There has been focus on Investment Linked Insurance Products to maintain leadership in product innovation.  Multi distribution Channels- Direct Sales force, Alternative Channels and Group offering convenient channels of purchase to customers  Web enabled IT system for superior customer services.  First to have issued policies over the internet.  Corporate governance and a high degree of transparency in all business practices and procedures. Vision To be a world class provider of financial security to individuals and corporate and to be amongst the top three private sectors life insurance companies in India.
  29. 29. 28 | P a g e Mission To be the first preference of our customers by providing innovative, need based life insurance and retirement solutions to individuals as well as corporate. These solutions will be made available well trained professionals through a multi- channel distribution network and superior technology. It will provide constant value addition to customers throughout their relationship with us, within the regulatory framework. Values  Integrity  Commitment  Passion  Seamlessness  Speed
  30. 30. 29 | P a g e Location of Birla Sun Life Insurance
  31. 31. 30 | P a g e Birla Sun Life Insurance Achievements In the "Great Places to Work - 2006 Survey", Birla Sun Life Insurance Company Limited secured the18th position amongst the top 25 companies. The company had secured a rank in the "Top 25" by the "Grow Talent - Great Places to Work" survey another time as well. In the Cirrus & ORG Media survey, Birla Sun Life Insurance secured the 3rd position amongst the various private life insurance companies. Awards: At Birla Sun Life Insurance, winning is a way of life. Our innovative solutions and customer-friendly services have been admired, appreciated and rewarded by customers and the industry at large. Awards showcase: Recruiting and Staffing Best in Class Awards Outlook Money Awards 2004 Bsli - Best Life Insurer (Runner Up) 2004 Trophy. Outlook Money Awards 2004 Bsli - Best Life Insurer (Runner Up) 2004 Certificate. The 8th Asia Insurance Industry Awards 2004 - Birla Sun Life Insurance was among the top five nominees in the category.
  32. 32. 31 | P a g e The Indo-Canadian Business Chamber- BSLI awarded for its 'Successful Performance' for 4 years April 2005. Birla Sun Life Insurance was presented 'The Hewitt Best Employers In India Awards 2004' Trophy. Birla Sun Life Insurance was awarded 'The Great Place to Work Seminar Series 2007’ Presented by Anil Sachdev (Chairman & MD of Grow Talent Company Ltd) Robert Levering (Co-founder Great Place to Work Institute) and Jehangir Pocha (Business World Magazine). The Bhartiya Shiromani Puraskar awarded to BSLI at the seminar on "Economic Development” New Delhi, on February 13, 2006. This is a Certificate of Excellence for Enhancing the image of India presented by Dr. Bhishma Narain Singh (Former Governor of Tamil Nadu & Assam) in association with the "Institute of Economic Studies (IES)". A letter sent to BSLI - A Message from the Mayor, David Miller - Toronto, December 2005. Hewitt Best Employers in India 2004. Sponsorship Acknowledgement for - The Asia Insurance Review.
  33. 33. 32 | P a g e Key Peoples of Organisation Board of Directors 1. Mr.Kumar M Birla 2. Mr. Donald A Stewart, 3. Mr. Bishwanath N Puramnalka 4. Mr. Ajay Srinivasan 5. Mr. Gary M Comerford 6. Mr. Suresh N Talwar 7. Mr. Oian P Gupta 8. His Highness Maharaja G Singh 9. Mr. Stephan Rajotte 10. Dr. Bharat K Singh Investment Committee 1. Mr. B. N. Puraiimalka 2. Mr. Eugene Lundrigan Management Team 1. Mr. VikramMehmiPresident & Chief Executive Officer 2. Mr. MayankBathwal Chief Financial Officer 3. Mr. Mario Braganza Chief Operating Officer 4. Mr. E.N. Uoveia Head - Direct Sales Force 5. Mr. AmitPunchhi Senior Vice President - Third Party Distribution 6. Mr. BhaveshSanghvi Head - Group Life & Pensions 7. Mr.SnehalShah Senior Vice President" Operations 8. Ms. Anjan a Grewal Senior Vice President - Marketing & Communications 9. Mr. Vikram 10. Mr. MayankBathwal 11. Mr. Fabicnjeudj 12. Mr. Fabien Jeudy
  34. 34. 33 | P a g e 13. Mr. K.H. Venkatachalam Vice President - Human Resource 14. Mr. LalitVermaoi Vice President - Compliance 15. Mr. Melvyn D'souza Vice President - Risk Management and Internal Audit 16. Mr. VikramKotak Vice President - Investments 17. Mr. Bhalachandra Nayak Vice President – Strategy
  35. 35. 34 | P a g e Chapter 4 - Product Profile Insurance Plans Life is unpredictable. But in face of adversity, our responsibilities towards our parents, children and loved ones need not be compromised. Insurance planning equips you to smooth out the uncertainties and adversities that life might send your way, so that the best that life has to offer, secure in the knowledge that your beloved ones are well provided for. BSLI offers a complete range of insurance products 1. Protection Plans 2. Savings Plans 3. Child Plans 4. Investment Plans 5. Retirement Plans 6. Group Plans 7. Rural Plans 8. Plans for NRIs 9. Keyman Plans 10. Riders Protection Plans Life Guard BSLI offers Lifeguard - a set of pure protection plans. Choose from amongst three different product structures to insure your life and provide total security to your family, at a very affordable cost. Level Term Assurance with return of premium  On death the entire sum assured will be paid.  On maturity, all the premiums paid will be returned.
  36. 36. 35 | P a g e Level Term Assurance without return of premium  On death the entire sum assured will be paid.  No survival or maturity benefits.  You can also enhance the above two policies by adding Accident & Disability Benefit Rider and Waiver of Premium Rider (WOP). Level Term Assurance - Single premium:  On death the entire sum assured will be paid.  No survival or maturity benefits Saving Plans BSLI offers a variety of policies that give you the benefits of protection and the opportunity to save for important assets or events, like a home, a car or a wedding. Invest Shield Cash A regular premium unit-linked insurance plan with an assurance of Capital Guarantee# with the added advantage of flexible liquidity option.An ideal plan for long term planning with the benefit of liquidity. The key features of the plan are:  Flexibility to choose a specific level of protection (Sum Assured), based on a multiple of the annual premium. You can also choose the term of the plan.  At the end of the term, the higher of the value of units or the guaranteed value* is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable.  Facility to make withdrawals from the 6th policy year onwards till the end of the policy term. Every year withdraw up to 10% of the value of units.
  37. 37. 36 | P a g e  Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.  Additional insurance for 10 years after the maturity, for an amount of 50% of the Sum Assured.  Flexibility to make additional investment with the help of the top-up facility.  Flexibility to increase / decrease your annual premium amount.  Facility of Automatic Premium Payment- With this facility you can take a temporary break from premium payment.  Total transparency with the premium allocations, and other charges declared upfront.  The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) along with the declared bonus interests.  With Automatic Premium Payment facility, you can avail a temporary break from premium payment for a maximum of 1 year. This facility is available once if the premium paying term is less than 15 years and twice, if it is 15 years or more.  You can also enhance your policy by adding Accident & Disability Benefit Rider, Waiver of Premium Rider and Critical Illness Rider. Invest Shield Life A regular premium unit-linked insurance plan with an assurance of Capital Guarantee an ideal plan for your long-term savings and protection requirement.
  38. 38. 37 | P a g e The key features of the plan are:  Flexibility to choose a specific level of protection (Sum Assured), based on a multiple of the annual premium. You can also choose the term of the plan.  At the end of the term, the higher of the value of units or the guaranteed value is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable.  Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.  Additional insurance for 10 years after the maturity, for an amount of 50% of the Sum Assured.  Flexibility to make additional investment with the help of the top-up facility.  Flexibility to increase / decrease your annual premium amount.  Facility of Automatic Premium Payment- With this facility you can take a temporary break from premium payment.  Total transparency with the premium allocations, and other charges declared upfront.  The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) along with the declared bonus interests.  With Automatic Premium Payment facility, you can avail a temporary break from premium payment for a maximum of 1 year. This facility is available once if the premium paying term is less than 15 years and twice, if it is 15 years or more.  The capital guarantee is applicable only on the invested premium and the declared bonus interests.
  39. 39. 38 | P a g e  You can also enhance your policy by adding Accident & Disability Benefit Rider, Waiver of Premium Rider and Critical Illness Rider. Invest Shield Gold A unit-linked insurance plan with an assurance of Capital Guarantee which offers you the benefit of a limited premium payment term.An ideal plan for protection with wealth creation that offers the flexibility of a limited premium paying term. The key features of the plan are:  Flexibility to choose a premium payment term of 5, 7 or 10 years for a maturity term of 10, 15 or 20 years respectively.  Flexibility to choose a specific level of protection (Sum Assured), based on a multiple of the annual premium.  At the end of the term (maturity), the higher of the value of units or the guaranteed value* is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable.  Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.  Facility to make withdrawals from the 6th policy year onwards till the end of the policy term. Every year withdraw up to 10% of the value of units  Flexibility to make additional investment with the help of the top-up facility.  Flexibility to increase / decrease your annual premium amount.  Total transparency with the premium allocations, and other charges declared upfront.
  40. 40. 39 | P a g e  The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) along with the declared bonus interests.  The capital guarantee is applicable only on the invested premium and the declared bonus interests.  You can also enhance your policy by adding Accident & Disability Benefit Rider and Critical Illness Rider. Premier Life Presenting Premier Life – The Preferred plan for the Preferred Customer. The key features of the plan are:  Limited premium payment option: Choose from among a 3, 5, 7 or 10 year premium paying term.  Choice of sum assured: Choose a sum assured, which is a minimum multiple of 1 and a maximum multiple of 25 times the annual contribution.  Additional allocation of units on a periodic basis.  Facility to top-up your investment any time you have surplus funds.  Choose from among four funds, based on your investment objective and risk appetite.  Choice to switch between investments options (4 free switches every policy year). Flexibility to decrease your sum assured.  Add-on riders to protect you against any eventuality.  Loans against the policy.  You can also enhance your policy by adding Critical Illness Rider, Accident & Disability Benefit Rider.
  41. 41. 40 | P a g e Life Time  Presenting Life Time – unit –linked plans that meet your changing needs over a lifetime.  These solutions have been developed to meet your savings, protection and investment needs at every stage in life. Protection  Choose a specified level of protection (available only with Lifetime).  Two levels of Sum Assured to choose from (available only with Lifetime II).  Flexibility to increase or decrease your sum assured.  Add-on riders to protect you against any eventuality. Savings  Flexibility to increase or decrease your contribution.  Facility of Premium Holiday, wherein the policy continues even if there is a temporary break in the payment of annual contribution (available only with Life Time).  Facility of Automatic Cover Continuance, wherein the policy continues even if there is a temporary break in the payment of annual contribution.  Facility to top-up your investment any time you have surplus funds.  Additional allocation of units on a periodic basis.  Loans against the policy.
  42. 42. 41 | P a g e Investment  Choose from among four funds, based on your investment objective and risk appetite.  Choice to switch between investments options (4 free switches every policy year).  You can also enhance your policy by adding Critical Illness Rider, Major Surgical Assistance Rider, Accident & Disability Benefit Rider, Accident Benefit Rider (available only with Life Time) and Waiver of Premium Rider Secure Plus  An insurance plan that gives added protection, savings and multiple options, all in one!  The flexibility to choose your premium contribution.  The flexibility to choose amongst three levels of cover (in the form  of sum assured) for the same amount of total annual contribution.  The flexibility of shifting between the three levels of cover, as you require.  The flexibility of receiving your maturity proceeds as a lump sum or in equal annual instalments over 3 or 5 years.  You can also enhance your policy by adding Variety of Riders
  43. 43. 42 | P a g e Cash Plus  An insurance plan that gives you added protection, savings, multiple options, plus the power of liquidity.  The flexibility to choose your premium contribution.  The flexibility to choose amongst three levels of cover (in the form of sum assured) for the same amount of total annual contribution.  The flexibility of shifting between the three levels of cover, as you require.  The flexibility of receiving your maturity proceeds as a lump sum or in equal annual instalments over 3 or 5 years.  The flexibility of withdrawing up to 10% of the accumulated value of your policy, after the first 5 policy years.  You can also enhance your policy by adding Variety of Riders. Save and Protect  An ideal plan for those who want to accumulate funds on a regular basis while enjoying insurance protection.  Guaranteed Benefits: Guaranteed additions @ 3.5% of the Sum Assured, compounded annually for the first 4 years of the policy.  Extended Life Cover: An extended cover for 5 years after the maturity of the policy, for 50% of the sum assured, at no extra cost.  Maturity Benefit: At the end of the term, the policyholder receives the full sum assured, the guaranteed additions and the vested bonuses.  Death Benefit: The beneficiary receives the sum assured, the guaranteed additions and the vested bonuses in case the life assured were to meet with an unfortunate event. In case the life assured is aged 7 years or less, the basic premium paid will be returned. You can also enhance your policy by adding Critical Illness Rider, Major Surgical Assistance Rider, Accident & Disability Benefit Rider, and Waiver of Premium Rider (WOP)
  44. 44. 43 | P a g e Child Plan As a responsible parent, you will always strive to ensure a hassle-free, successful life for your child. However, life is full of Uncertainties and even the best-laid plans can go wrong. Here’s how you can give your child a 100% safe and assured tomorrow, whatever the uncertainties. Smart Kid is especially designed to provide flexibility and safeguard your child’s future education and lifestyle, taking all possibilities into account. Choose from amongst a basket of 4 plans:  Smart Kid regular premium  Smart Kid unit-linked regular premium  Smart Kid unit-linked regular premium II  Smart Kid unit-linked single premium II All above plans offer you:  Financial Benefits: Regular payments at critical stages in your child’s life, like Board examinations, Graduation and Post-graduation. Total peace of mind, even if you are not around  Sum Assured is paid immediately: Ensures that your loved ones stay financially secure, even in your absence.  All future premiums are waived: Ensuring that your family is not financially burdened in your absence.  Policy benefits continue: The educational benefits of the policy continue, ensuring that your child can realize his or her dreams without any hassles.  Development Allowance: Smart Kid guarantees regular income to secure your child’s educational career and also ensures his or her all-round development, for a nominal additional amount. The Income Benefit Rider takes care of this through an annual payment of 10% of the sum assured, to your child, till the maturity of the policy, in the unfortunate event of the death of the parent .All Smart Kid plans can be enhanced with the Accident & Disability Benefit Rider and Income Benefit Rider. You can also an Accident Benefit Rider to a Smart Kid Regular Premium policy, and a Waiver of Premium Rider (WOP) to Smart Kid unit-linked regular premium policy. Investment Plans
  45. 45. 44 | P a g e Life Link II is a unique plan that combines the security of a life insurance policy with the opportunity of enjoying high returns on your investments, without the market risks compromising on the protection of your family. Death Benefit: The Sum Assured under the product has 2 options, either 500% of the initial premium or 105% of the initial premium. In the event of an unfortunate death, the beneficiary will receive higher of the value of units or the initial death benefit, less any withdrawals. Withdrawal Benefit: One can make partial withdrawals from the accumulated value of the policy after completion of one policy year. Flexibility: Choose from four fund options, based on your investment objective and risk appetite. If at a later stage your financial priorities change, you can switch between the various fund options, absolutely free, 4 times a year. Retirement Plans Life Expectancy has been rising rapidly and today you can expect to live longer than your earlier generations. For you, this increase will mean a longer retirement life, stretching into a couple of decades. BSLI Retirement Solutions that combine the best of insurance and investment. These solutions are developed to ensure your peace of mind for the years to come.  Why plan for retirement?  How much should I set aside for retirement?  The impact of inflation on your retirement savings  Why plan early?  About Annuities Why plan for retirement? For too many people, the joy of retirement after years of hard work is eclipsed by the financial uncertainties that it brings. Despite all the planning and saving, you can never sure whether your money will last a lifetime. Retirement planning offers a way to ensure a more enjoyable, stress free tomorrow. A prudent plan will ensure that increasing life expectancy, higher inflation and increasing taxes do not eat away into your hard earned savings. How much must I set aside for retirement?
  46. 46. 45 | P a g e To ensure a comfortable retired life, you would be wise to invest money into additional avenues like pension plans. How much you need to invest can be answered by answering some questions such as:  How long do you have to save that amount before retirement?  Where can you invest your retirement money?  How much risk are you willing to take on your investments? Group Solutions In an era of competitive parity, the only asset that makes a decisive difference between corporate success and failure is the quality of human capital. Employee benefits have proven to be an excellent tool to optimize the retention of talent and improve an organization’s bottom-line. The quality of an organization’s employee benefits establishes and maintains a company's image as a caring employer. Optimum care of employees is a long-term investment that results in a sustained competitive advantage for an organization in the times to come. BSLI Group Solutions Advantage: An integrated basket of employee benefits solutions that offer incomparable flexible benefits. Sound investment management that focuses on safety, stability and profitability of the portfolio. Personalized financial planning for your employee that takes care of his/her changes financial needs at every stage of life.Quality service initiatives and transparency across all operations, promising superlative operational efficiency.  Group Term Assurance: Helps provide affordable cover to members of a group.  Group Gratuity Plan: Helps employers fund their statutory gratuity obligation in a flexible and hassle-free manner.  Group Superannuation Plan: A flexible scheme (defined benefit and defined contribution) to provide a retirement kitty for each member of the group.  Group Term Assurance: BSLI flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary, and can be extended to all employees between the ages of 18 and 65 years. The benefit under the policy is paid on the event of the member’s death to
  47. 47. 46 | P a g e the beneficiary nominated by the member. It is a one-year renewable policy where one master policy covers all proposed employees comprising the group, with a minimum group size of 25 persons. New members can join the group and outgoing members can leave the group at any point during the policy term. Highlights include:  Greater convenience: for the employees with relaxed underwriting and medical requirements.  "Free Cover Limits": with simplified underwriting depending upon the number of employees in the group and the level of cover chosen.  Guaranteed benefit: On death during the term of the contract (while in service), the sum assured will be paid to the beneficiary of the employee.  Choice of additional coverage in form an Accident and Disability Benefit Rider and Critical Illness Cover  Premium is viewed as a business expense in the year of payment. Group Gratuity Plan BSLI group gratuity plan helps employers fund their gratuity obligation in a scientific manner. Employers can avail of the tax benefits as applicable to approved gratuity funds. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. Highlights include:  Wider choice of investments with Market Linked Plans - to meet the diverse financial goals. We offer 4 investment options (short-term debt, debt and balanced and capital guarantee plan) where investments will be made in accordance with the fund objectives.  Transparency through Daily disclosure of Unit Value and regular disclosure of the portfolio of each of the investment option.  Flexibility through switching and contribution redirection option to enable reshuffling of portfolio  Bundled Life Cover greater values to the employee by packaging life insurance cover with the gratuity, with minimal amount of underwriting.  Actuarial services to provide a scientific estimation of the gratuity liability.
  48. 48. 47 | P a g e  Low explicit charge structure with the conditions for exit specified upfront.  Enhanced service levels through faster claim settlement, easier access to information and regular statements.  Complete end to end solutions in the legal and regulatory approval process for scheme set up or transfer. Employee Benefits: The contribution made by the employer is not included in the value of taxable perquisites in the hands of the employee. Gratuity received up to Rs 350000 is exempt from Income tax under Sec 10(10) Employer Benefits: Annual contribution up to 8.33% of salary bill in a financial year is allowed a deduction for the purpose of computation of profits and gains of business. Contribution towards past service liability is allowed as deduction as per the Income Tax rules. Group Superannuation Plan: BSLI Superannuation Scheme (for both Defined Benefit and Defined Contribution funds) offers substantial benefits to both employers and employees. The employer and employee can avail of tax benefits applicable to an approved superannuation trust. The scheme will provide for a retirement fund for each participating employee. An employee would be able to choose from various annuity options or opt for partial commutation of corpus at retirement. Highlights include:  Wider choice of investments with Market Linked Plans - to meet the diverse financial goals. We offer 5 investment options (short-term debt, debt, balanced, growth and capital guarantee plan) where investments will be made in accordance with the fund objectives.
  49. 49. 48 | P a g e  Control - Each member/employer can exercise greater control over investments by choosing one or more of the investment options.  Multiple Annuity Options - 5 annuity options and open market option  Transparency - Transparency through Daily disclosure of Unit Value and regular disclosure of the portfolio of each of the investment option  Flexibility - Flexibility through switching and contribution redirection option to enable reshuffling of portfolio  Low explicit charge structure with conditions for exit specified upfront.  Enhanced service levels through faster claim settlement, easier access to information and regular statements.  Complete end to end solution in the legal and regulatory approval process for scheme set up or transfer Rural Plans BSLI Rural Products are designed to meet the needs of the rural consumers. These products offer the following features: 1. Low and Affordable Premiums 2. Life Cover 3. Savings Option 4. Hassle free procedure BSLI offers 2 specially designed rural plans. 1. BSLI – Endowment Plan 2. BSLI - Regular Premium
  50. 50. 49 | P a g e BSLI offers the following features: Life Cover Savings Age at entry 18 - 45 Yrs. Premium Mode Half Yearly / Yearly Term 5, 10, 15Yrs. Sum Assured Rs.5, 000 -20,000 Premium / Year Rs. 507 - 553 (SA: Rs.10, 000) Maturity/Death benefit Sum Assured NRI Plans Being away from India doesn't mean you have to compromise the safety and security of your loved ones. In fact, your savings from your time overseas can be easily canalized to meet your family's needs - now and in the future. So, whether it’s your dream to retire in your hometown; to secure funds for your children's education; or to build assets, BSLI has a range of solutions that can be customized to meet your needs. Birla Sun Life Insurance Gold Plus Plan Don't we always wish for that something more? A bigger house, a plush set of wheels, holidays in exotic lands. Here's something that makes sure you get all that and much more. Presenting the Birla Sun Life Insurance Gold-Plus Plan - a plan unlike any other. It covers your life while giving you an opportunity to grow your investments for the medium term. Details 1. An opportunity to grow your investments for medium term. 2. Policy terms 8 years. 3. Paying period 3 years 4. The policyholder has an option to reduce the annualized policy premium in the 2nd and 3rd year subject to a minimum annualized premium of Rs.10, 000 per year.
  51. 51. 50 | P a g e Chapter 5 - Indian Regulatory Development Authority (IRDA) IRDA: The insurance sector has been opened up in India, as there was an urgent need. The international experience indicates those with a liberalized insurance sector have witnessed a rapid growth in premium volumes enhancing the domestic saving rate. This happened in China, Malaysia and Singapore where a competitive market hits led to improvident in Entices and quicker settlement of claims. It is also important to note that competition will bring about advancement in intonation, communication and technology. And rightly therefore a decision was taken by the Government of India to open up insurance sector. The establishment of IRDA in the month of April 2000 has been important development in this direction, making the end of monopoly in the insurance sector. Why Insurance In India: 1. Only 22% of the insurance population lies been extended cover. Market penetration is low and the potential to exploit is high. 2. Insurance premium per capita is very low. 3. Lack of comprehensive social system benefit and welfare means that in and for pension products is high. 4. I luge middle class of approximately 300 Million. 5. Existing insurance company score Sow on customer service front. The insurance market registered growth in the Asian region even though India's share in global insurance is less than 0.5% (1988) as compared to USA (24.2%) and Japan (2) %). Studies have reveled that in an emerging market, as disposable income rises. Insurance premiums as a ratio of GDP shoot up. The confederation of [Indian Industry projected a growth of Life Insurance premiums from Rs. 350 Billion at present to Rs.140 Billion. The growth of non-life insurance premium is expected to increase from 75 billion to 375 billion. Out of which, only 10% is tapped by the existing insurer. Insurance even more than banking is a volume game. A very exclusive approaching in view is unlikely to provide meaningful numbers. Currently, insurance is bought for the purpose of tax-benefits. A higher percentage of business is in the rural market The share of rural new business insurance total new business is 55% in terms of policies and 47% in terms of sum assured, However, this needs to be
  52. 52. 51 | P a g e viewed in the light to some recent issues that have been raised regarding as to what constitutes the rural market. Therefore, private insurers will be best served by middle market approach, targeting the customer segments that are presently unexploited. How many Indians are aware that LIC has more than 60 products and GIC has more than 150products? Not only there is a reduction in the premiums of Life Insurance products have long overdue since Indian morality rate has decreased three folds in the last 50years. There is also scope to increase the yield on life insurance policies (presently 6%) with proper risk management in place. It is been debated tilt insurance business does not produce profit in the First five years cross subsidization is a feature of Indian market. Even the first portfolio vote that is considered profitable, cross subsidizes other departments, Tariffs reduction is likely to reduce profits; further insurers have to institute proper claims management progress in order to extract efficiencies. At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The government is soon to present a new model of taxing life insurance companies at international rates. New entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to produce your technology will prove most valuable in the long run. Banks and financial companies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which already apply in other world market. First Banking food insurance, fund management and other financial services companies are being to increase their profitability and provide maximum value to their customers. Therefore, they are themselves looking for a range of products to distribute. Insurers will be best served by middle market approach, targeting the customer segments that are presently unexploited. How many Indians are aware that LIC has more than 60 products and GIC has more than 150 products? Not only there is a reduction in the premiums of Life Insurance products have long overdue since Indian morality rate has decreased three folds in the last 50years. There is also scope to increase the yield on life insurance policies (presently 6%) with proper risk management in place. It is been debated that insurance business does not produce profit in the First five years cross subsidization is a feature of Indian market. Even the first portfolio vote that is considered profitable, cross subsidizes other departments, Tariffs reduction is likely to reduce profits; further insurers have to institute proper claims management progress in order to extract efficiencies.
  53. 53. 52 | P a g e At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The government is soon to present a new model of taxing life insurance companies at international rates. New entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to produce your technology will prove most valuable in the long run. Banks and financial companies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which apply in other world market. First Banking food insurance, fund management and other financial services companies are being to increase their profitability and provide maximum value to their customers. Therefore, they are themselves looking for a range of products to distribute.
  54. 54. 53 | P a g e Chapter 6 - Research Methodology “The research design is the conceptual structure with in which research is conducted it consist the blue print of the collection measurement and analysis of data.” In that project the research design was adopted for the “Descriptive research study” the exploratory research studies are also termed as formulate research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypothesis from an operational point of view. The main purpose of the study was to tell the consumer perception in a Research Methodology. The major emphasis was on the discovery of the ideas and opinions of the consumers at different levels in the existing environment. Two methods that are used for the study are: 1. The survey of concerning literature. 2. The experience study. Sample Design A sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting items for the sample. The sample design is determined before data are collected. The sampling used for the study is “Convenience Sampling”. Under this sampling design every item or the universe has equal chance or inclusion in the sample because this is Consumers’ Perception survey, so we give each person at any place an equal probability of getting into the sample. Data Collection Collecting the data through different resources. In the survey two types of data are collected: 1. Primary data: These data’s are those which are collected for the first time and therefore original in nature.
  55. 55. 54 | P a g e 2. Secondary data: Data, which have already been collected by someone else and hence passed through the statistical process. Data Source There are two sources of collecting data: PRIMARY DATA COLLECTION For the collection of the primary data following methods were used: 1. Interview method: Personal interviews of the customers are taken at different levels to get their opinions and suggestions. And the interview was structured in nature. 2. Questionnaire method: Structured questionnaire on the basis of information collected from different sources. The questionnaire contains both open and ended questions. SECONDARY DATA COLLECTION Secondary data were collected from the following sources: 1. Books related to topic 2. Organization documents 3. Magazines 4. Websites Data Approaches Stratified Random Probability Sample Selection Method. Research Instrument 1. Questionnaire 2. Focus Group 3. Observation 4. Direct Method Mechanical Instrument  Telephonic Method
  56. 56. 55 | P a g e Population: 1. Sampling Unit: Comparative Study between Birla Sun life & Other Insurance Companies 2. Sample size: Approximate 100 3. Sample Selection Procedure : Probability 4. Contact Method 5. Direct method 6. Telephone Sample size: We have meet 100 people during requirement advisor and policy selling after that, I have taken 25 peoples they have fill up the questionnaire and given response.
  57. 57. 56 | P a g e Chapter 7 - Scope & Importance of Study To determine and analyzed the Market Potential of the Birla Sun Life Insurance Company in Moradabad City.  To study the overall scenario currently prevailing in the market, namely, the per capital income, purchasing power, occupation, literacy rate, etc.  To study and determine the competitor position in the market.  To give benefit to the people as well as to earn profit. To do a performance evaluation of Birla Sun Life Insurance products in comparison on with other insurance of company. Objectives of the Study  To get an overview of the general insurance industry  To study the overall working of Birla Sun life Insurance Co. Ltd.  To understand the organizational structure of BSLI Ltd.  To study the functions of different departments.  To understand SWOT analysis of the organization. Limitations of the Study  The time allotted for conducting the organizational study was only 30 days. It is not enough for understanding about the organization in detail.  Unavailability of some documents which were confidential.  Employees were busy in their work so they could not give more information.  There may be errors due to the bias of the respondents.  The study is limited to my experience and knowledge.
  58. 58. 57 | P a g e Chapter 8 - Review Of Literature Here in review of literature I studied the role of relationship marketing in life insurance sector. In today’s impersonal marketplace, customer satisfaction, retention and loyalty are rapidly become the thing of the past. Relationship marketing brings them back to the forefront, providing easy-to-apply solutions and strategies for establishing meaningful bonds with customers and turning them into reliable, life-long partners. Relationship marketing can be defined as the process to “identify and establish, maintain and enhance and, when necessary, terminate relationships with customers and other stakeholders at a profit so that the objective of all parties involved are met and this is done by mutual exchange and fulfilment of promises”. The important objectives The important objectives The important objectives of relationship marketing are to acquire new customer s, maintain and enhance existingrelationships with existing customers, reactivation of ex-customers, and handling of customer terminations. The key objective of relationship marketing is to establish a one to one relationship with all the customers. This may sound like a daydream few years ago; but thanks to the technology breakthrough and technological solutions providers it is very much of reality. I revised that insurance sector has not only been playing a leading role within the financial system in India but also has significant socio-economical function, making inroads into the interiors of the economy and is being considered as one of the fast developing area in the Indian financial sector too. It has also been facilitating economic development with an objective to build an efficient, effective and a stable insurance business in India as well as a strong base to both the needs of the real economy and socio-economic objective of the country. It has been mobilizing long term saving through life- insurance to support economic growth and also facilitating economic development, insurance cover to a large segment of people, while thenon- life insurance and reinsurance firms in India are main providers of risk financing for manmade disasters and natural catastrophes. Thus, both life insurance and non-life insurance are found playing a significant role in avoiding or facing the risk of life and business enterprises and also aiding to certain extents for their smooth sailing. Therefore, an attempt is made in this paper to highlight the developments of insurance sector in India in a phased manner and to examine the reasons for the entry of private and foreign insurance players into Indian insurance market and to present the changing scenario of insurance
  59. 59. 58 | P a g e business in India. It is also attempted to examine the growth of Indian insurance sector during the period of pre and post liberalization and finally to suggest the strategies and challenges need to be adopted by Indian insurance sector in the light of global scenario so as to enhance its market share Also studied that economic growth in the emerging markets has time and againoutpaced the developed and industrialized countries. Alongside the rising importance of emerging economics, their life insurance sectors are also drawing more attention. It’s been four years since the life insurance sector was opened up for private players in India. The reasons that prompted the government to bring in reform in this sector are well known. While the public sector life insurance companies made enormous contribution in the spread of awareness about insurance, and expanded the market, it was recognized that their reach was still limited, the range of product offered restricted to the services to the consumer inadequate. It was also felt that the rapid economic growth witnessed in the 90s couldn’t be sustained without a thriving insurance sector. Today, the private accounts for nearly 20% of the market. The market share of the private players has to be seen in the context of this enlarged market. There has been a flurry of private players providing a wide range of innovation products, services and customized solutions.Emerging markets-such as China, India, Mexico, and Russia- are home to some 86% of the world’s population. Collectively, they account for 23% of world economic output. Yet, insurance business is underdeveloped in these markets .In fact, India as a country is under-insured. Only 35% of the 250 million insurable populations insured. Exploiting the growth potential of emerging insurance market- India and China are in the spotlight. Both the countries currently attract a lot of attention due to their size, strong growth performance and favourable regulatory changes. To begin with, India and China are the most populous countries and both have sustained impressive economic growth in the last decade .Between 1993 and 2003, annual real GDP growth averaged 8.9% in china and 5.9% in India.Interestingly, both markets have gone through a similar period of nationalization of their insurance business, although China revoked state monopoly earlier than India. Also many insurance companies vigorously pursue top-line growth, even though it has the potential to develop unprofitably over time. The time lag (or tail) between when insurance is sold and when claims are paid generates risks
  60. 60. 59 | P a g e unique to insurance companies. Furthermore, the insurance market is both mature and efficient (i.e. its level of 2). Completion is very high), which means that profitable opportunities are both rare and untenable unless protected by competitive advantage. There currently no practical measure available ( of which the authors are aware ) at the business unit level to evaluate insurance premium growth in the face of the industry’s risk, impairing executives’ ability to assess segment opportunities (and hazards), thus hampering strategies decision making. The purpose of this paper is to introduce a practical measure developed by the authors called Underwriting Return (UWR) which aims at helping to alleviate this situation. The paper introduces UWR which was developed during the course and scope of the authors’ work in the insurance industry, and their research into applying value- based management to that industry. The paper finds that UWR is a practical measure that property and casualty executives can use at the business unit level to help quantify market segments to grow, hold, harvest and abandon. A variety of strategies analysis tools, such as the popular Boston Consulting Group matrix, are utilized today. In general, the application of such tools is hampered by an imprecision of measurement but each can add a level of insight to executive’ resource allocation options. UWR can further aid insurance executive in strategic analysis by helping to quantify in which segments to compete, and which ones to abandon. The paper demonstrates the utility of the measure in an example based on an actual analysis. All the aspects of the Indian insurance industry along with an outlook for potential developments. The report examines the trends in industry, besides the competitive landscape offers a brief analysis on the main players in the industry. It contains an assessment based on PEST analysis, covering the relevant political, economic, social and technological factors that have implications for the development of the industry. The report also evaluates the industry within the Michael porter framework. It goes on to describe the competitive land scape and provides a comparative financial study of the major players in the industry. Insurance constitutes an important and increasing proportion of the gross financial savings of the householdsector in India. The private sector, in life as well as the non- life segments gained more prominent in the life insurance sector. The factors that have driven change include: > Increasing Gross Financial Household Savings. > Deregulation in the Indian Insurance Market. > Increase in
  61. 61. 60 | P a g e dependency ratio However, dearth of new products represents a major implication. I studied the concept of banc assurance in India. Banc assurance has mostly been phenomenal success and , although slow to gain pace, is now taking off across Asia, especially now that banks are starting to become more diverse financial institutions, and the concept of 3 Universe banking is being accepted. In India, the signs of initial success are already there despite the fact that it is completely new phenomenon. The factor and principles of why it is a success elsewhere exists in India, and there is no doubt that banks are set to become a significant distributor of insurance related products and services in the years to come. I analysed that the insurance industry has grown by 83 per cent since the openingupthe sector. Remarking on the performance of the insurance industry, public sector players have not suffered with the opening up of the sector. Insurance premium income has risen to Rs 82,415 crore (Rs 824.15 billion) in 2003-2004, against Rs 45,000 crore (Rs 450 billion) in 2000-01 expects premium income in the life insurance sector to rise further by 15-16 % and non- life insurance premium by 14 % in 2005-06. The growth comes on the back of healthy demand from the manufacturing sector I reviewed in their study that the market potential for private insurance companies is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. The private and foreigninsurance companies have too immediate steps in appointing more number of agents and/or advisors in addition to the employees as it has found that agents are the best channel to reach thegeneral public regarding selling of insurance products. The private and foreign insurancecompanies have to concentrate on the factors like ‘prevention of loss’, ‘assured returns’ and ‘long term investment’. They can also focus on an insurance amount of Rs. 1-2 lakhs with ‘ money back policies’. Hence, the market has potential. The private and foreign insurance companies that are taking immediate steps can tap it.
  62. 62. 61 | P a g e Studied the impact of customers’ perception of customer service (bad/good) on variables that are known to drive revenue, i.e. customer satisfaction, perceived relative attractiveness, and commitment. Data were collected through a survey among bank customers. Two groups were sampled: customers who have experienced good or bad customer service. The hypotheses were tested by applying structural equation modelling and running two group analysis using the PLS and LISREL software’s. Customers that experience bad customer service do take into account the same variables in their evaluation as do customer’s that experience good customer service. They do however, put different weights on every factor in the evaluation process. Also the strength of the relationship between the variables seems to differ. Typically, analyses showed that customers experiencing bad customer service tend to consider more thoroughly all aspects of the service; the relationships between the variables were stronger and the explained variance of each construct higher, than in the group of customers experiencing good customer service. However, the paths are not different across the groups. The paper has only tested the model and hypothesis in one industry. Future research should test the same model using different industries reflecting different customer involvement levels. Practical implicationsfrom this study, service managers can learn that investing in customer service in ongoingcustomer relations is “the right thing to do” as it is linked to customer equity through customers ’commitment to the firm. Second, as customer service in such relationships drives perceived relative attractiveness, saving the bottom line by cutting back on the human side of the customer interaction, may harm the firm’s competitive position in the marketplace.
  63. 63. 62 | P a g e Chapter 9 - Finding & Analysis (Q & A) Question 1: Given a choice you would prefer to invest in? S.No. Investment Options Percentage 1 Fixed Deposits 31.4 2 Post Office Schemes 21.6 3 NSS 14.7 4 Shares 8.8 5 Insurance 12.7 6 Others 10.8 Interpretation: Mostly people are interested in investing in FDs, Post office schemes, NSS and Very few are i.e. 12.7% interested in investment in Insurance. Fixed Deposits 31% Post Office Schemes 21% NSS 15% Shares 9% Insurance 13% Others 11% INVEST OPTIONS Fixed Deposits Post Office Schemes NSS Shares Insurance Others
  64. 64. 63 | P a g e Question 2: How much of your income would you like to invest in insurance annually? S.No. 1 2 3 4 Income group 1000-5000 6000-10000 11000-20000 20000&above Percentage 36.3 39.2 12.7 11.8 Interpretation: Around 40% of respondents are willing to invest in insurance between Rs 6000-Rs 10000. Annually 36.3% people are ready to invest between Rs 1000 to Rs 5000 and very few are willing to invest in insurance above Rs10000 annually. 1000-5000 6000-10000 11000 - 20000 21000 & Above 0 10 20 30 40 50 60 70 80 90 100 Income Group Income Group
  65. 65. 64 | P a g e Question 3: While taking insurance plan how you rate the following? S.No. Purpose of Insurance Percentage 1 Tax Benefits 23.7 2 Investment 32.3 3 Saving 24.7 4 Risk 19.3 Interpretation: According to the rating, it has been found that people take insurance basically for risk coverage i.e. 19.3% and secondly in order to get tax benefits i.e... 23.7%, followed by savings i.e.24.7% and very few think it for investment Options. Tax Benefits 24% Investments 32% Savings 25% Risk 19% Purpose of Insurance Tax Benefits Investments Savings Risk
  66. 66. 65 | P a g e Question 4: In future, which life insurance plans you will prefer? S.No. 1 2 3 4 5 PLANS Pension Plan Protection Plan Saving Plan Investment Plan ULIP PERCENTAGE 55% 12% 8% 21% 4% Interpretation : The graph indicates that 55% of people will like to go for Pension Plan in future as most of them want to make their future secure . Very few people are aware of Unit Link Plans and would like to invest in them one of the reasons for this can be lack of information about such Plans. Pension Plans 55% Protection Plans 12% Saving Plan 8% Investment Plan 21% ULIP 4% Insurance Plans Pension Plans Protection Plans Saving Plan Investment Plan ULIP
  67. 67. 66 | P a g e Question 5: Percentage of People Having Life Insurance Policy? Sample size – 100 Interpretation: The above diagram represent that 93% of people are covered under life insurance while 7% are still not insured. Insured 93% Not Insured 7% People having Life Insurance Policy Insured Not InsuredInsured 93% Not Insured 7%
  68. 68. 67 | P a g e Question 6: Which Birla Sun Life Scheme do you have? S. No. 1 2 3 Plan Health Retirement Life Percentage 10% 22% 68% Interpretation: On the basis of above analysis it has been concluded that around 68% of the policy holders are having life plan, 22% of them are having Retirement plan and rest of them are having the health plan. Health Scheme 8% Retirement Scheme 23% Life Scheme 69% BSLI Scheme Health Scheme Retirement Scheme Life Scheme
  69. 69. 68 | P a g e Question 7: Is the plan of Birla Sun Life attracts the Investor? Option Percentage Yes 72 No 28 Interpretation: On the basis of the analysis it has been concluded that around 72%of the people are satisfied with plan they and rest of them are not satisfied. YES 72% NO 28% BSLI Plans YES NO
  70. 70. 69 | P a g e Question 8: Are you satisfied with the services provided by the company regarding new plans and schemes? Option Percentage Yes 82 No 18 Interpretation: On the basis of the above analysis it has been concluded that around 82% of the policy holders are satisfied with the services provided by the company and rest of them are not satisfied. YES 82% NO 18% Setisfied ? YES NO
  71. 71. 70 | P a g e Question 9: Are you interested to make more investments in BSLI? Option Percentage Yes 67 No 33 Interpretation: On the basis of the above analysis it has been concluded that around 67% of the policyholders are interested to make more investments in BSLI and rest of them are not interested. YES 67% NO 33% Intrested In Making More Investment BSLI ? YES NO
  72. 72. 71 | P a g e Question 10: Have you any other Insurance Plan apart from BSLI? Option Percentage Yes 72 No 28 Interpretation: On the basis of the above analysis it has been concluded that around 72% have a BSLI plan. YES 72% NO 28% Any Other Plans Apart Frm BSLI YES NO
  73. 73. 72 | P a g e Question 11: If yes, then of which Life Insurance Company? S. No. 1 2 3 4 5 Company LIC BSLI BAJAJ ALLIANZ ICICI OTHER Percentage 60 12 11 8 9 Interpretation: From the above analysis it has been concluded that around 89% of policy holders are having other insurance plans apart from BSLI, in which around 60 % are having LIC insurance plans, 11% are having Bajaj Allianz, 9% are having Birla Sun life, 8% are having ICICI Pro and 12% are having other company insurance plans. LIC 66% BSLI 13% BAJAJ ALLIANZ 12% ICICI 9% Insurance Companies Apart From BSLI People Prefer LIC BSLI BAJAJ ALLIANZ ICICI
  74. 74. 73 | P a g e Question 12: If you get any attractive plan than are you ready to switch over? Option Percentage Yes 82 No 18 Interpretation: On the basis of the above analysis it has been concluded that around 82% of the policy holders are ready to switch over if they get good attractive insurance plan and rest of them don’t. YES 82% NO 18% People Ready If They Get Attractive Plans by BSLI YES NO
  75. 75. 74 | P a g e Question 13: Percentage Of People Insured With Different Companies? S.No. COMPANIES PERCENTAGE 1 LIC 72.5% 2 HDFC- Std. Life Insurance 3.9% 3 ICICI 10.8% 4 Birla Sun Life 2% 5 Tata AIG 1% 6 Max New York Life 4.9% 7 No Response 5.9% Interpretation: While LIC still remains the undisputed leader with a commanding share of 72.5%.LIC is beginning to feel the pinch of a gradual warning of market share from 100%three years ago. Knocked by competition from private players it is making serious changes in its marketing strategies. LIC 83% HDFC 4% ICICI 12% BSLI 1% People Insured With Other Companies LIC HDFC ICICI BSLI

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