Project File Amar Bana

7/31/2019 Project File Amar Bana

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A

SUMMER TRAINING PROJECTREPORT

ON

Partial fulfillment of the requirement of two years

full timeMaster of Business Management

(MBA)

SUBMITTED TO SUBMITTED BY

DEPTT.OF BUSINESS AMAR SINGH RATHOD

ADMINISTRATION MBA IInd SEM

(M.D.U ROHTAK) ROLL NO.

ST. THOMAS MANAGEMENT INSTITUTE

JHANGIRPUR JHAJJAR HARYANA


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2008-2009

INDEX1.CERTIFICATE

2.DECLARATION

3.ACNOWLEDGMENT

4.PREFACE

5.INTRODUCTION

6.HISTORY OF INSURANCE

7.RELIANCE LIFE INSURANCE

8.PRODUCT MIX

9.MARKETING DEPARTMENT

10.FINANCE DEPARTMENT

11.DATA ANALYSIS & INTERPRATION

12.CONCLUSION

13.QUESTIONNAIRE

14.BIBLIOGRAPHY


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GFCGF


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DECLARATION

I, AMAR SINGH RATHOD from MBA 2nd Sem student of St. Thomas

Management Institute, Jahangirpur, Jhajjar (Haryana) hereby that

the project entitled, A study on Reliance Life Insurance, is an

original work and the same has not been submitted to any other

institute for the award of any other degree. The interim report

was presented to the supervisor on ______________________ and thepre- submission presentation was made on ___________________.

The feasible suggestions have been duly incorporated in

consultation with the supervisor.

Countersigned

Signature of the Supervisor Signature of

the Candidate

Forwarded by AMARSINGH RATHOD


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AKNOWLEDGEMENTI would like to thank my project guide

Sales Development Manager RELIANCE Life Insurance, DEHLI for guiding

me through my summer internship and research project. His

encouragement, time and effort are greatly appreciated.

I would like to thank ,. for supporting me

during this project and providing me an opportunity to learn outside the

class room. It was a truly wonderful learning experience.

I would like to dedicate this project to my parents. Without their help and

constant support this project would not have been possible.

Lastly I would like to thank all the respondents who offered their opinions

and suggestions through the survey that was conducted by me in DEHLI.

Once again my gratitude to the . For their

kind co-operation.


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VGHVGH

PREFACEThe Insurance Regulatory and Development Authority,

IRDA for short, has laid down that those who wish to


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become insurance agent will be licences only after they

complete a course of study and pass an examination

prescribed by it. In 2000, when the IRDA made the

relevant regulation s, the course of study was to last100 hours. The course, IC 33, was prepared keeping in

mind that requirement. In 2007 the period of

compulsory study has been reduced to 50 hours.

Accordingly , the prescribed syllabus has been modified

.The revised IC 33 has been prepared covering the new

syllabus.

The contents of this revised course deal with

all essential concepts, which, anybody working

with the business of life insurance must

know.These concepts form the basis of the life

insurance business . Insurers will have different

practices and offer different benefits in their plans.All of them will be based on these concepts. The

details of the practices and theplans of each

insurer, will have to be learnt from the respective

insurers.


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INTRODUCTIONpeople can be the greatest asset or biggest liability - as the

clich goes the only way to improve corporate performance is by

motivating employees to put in their best efforts. This means

rewarding them and to ensure reward and recognition.

Together result in higher return on investment . The best

way to achieve both objective reward and ROI is to have

the right metrics in place to measure employees

performance.Measuring performance is not as simple as it looks. The

performance measurement system have become more and mare

sophisticated in recent decade. Every system has its own

limitation . there is in fact no perfect system that can be

adopted without modification in any company.

At the same time the performance management process

encourage an on going dialogue between mangers and

employees. The manager share their insight with management

team during staffing reviews. Conducting periodic staffing

reviews gives Management opportunity and discipline to

discuss their views. How to support and develop their top

players. And how to deal with ones who underperformers.

Staffing reviews and the use of objective performance metrics

are by no means the easiest ways to evaluate employees. But

they are by far the most effective way to establish

performance driven culture that deliver results. Various

approaches to the performance measurement are available to

help assess the degree to whih the behavior of employees at

all organization level contributes to the implementation of

strategies . Measure of performance are necessary for the

implementation of strategies . Measure of performanc are


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necessary for the functioning of reward system. Performance

mesurment provide feedback on the degree to which the

behavior are congruent with organizational strategies. PMS is

valid source of guidance for future development effort.

AMAR SINGH RATHOD


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HISTORY OF

INSURANCE

INSURANCEhas been known to exist in some form or other since 3000 BC.

The Chinese traders, traveling treacherous river rapids would distributetheir goods among several vessels, so that the loss form any one vessel

being lost would be partial and shared, and not total the ancient land of

Babylonia where traders used to bear risk of the carvan by giving loans,

which were later repaid with interest when the goodsarrived safely.

The concept of insurance as we know today took shape in 1688 at a place

called Lloyds Coffee House in London where risk bearers used to meet to

transact business. This coffee house became so popular that Lloyds

became the one of the first modern insurance companies by the end of the

eighteenth century.

Marine insurance companies came into existence by the end of the

eighteenth century. These companies were empowered to write fire and life

insurance as well as marine. The Great Fire of London in 1966 caused

huge loss of property and life. With a view to providing fire insurance

facilities, Dr. Nicholas Barbon set up in 1967 the first fire insurance

company known as the Fire office.


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Life insurance in its modern form came to India from England in 1818. The

Oriental Life Insurance Company was the first insurance company to be set

up in India to help thewidows of European community. The insurance

companies, which came into existence between 1818 and 1869, treated

Indian lives as subnormal and charged an extra premium of 15 to 20percent. The first Indian insurance company, the Bombay Mutual Life

Assurance Society, came into existence in 1870 to cover Indian lives at

normal rates.

The Insurance Act, 1938, the first comprehensive legislation governing both

life and non-life branches of insurance were enacted to provide strict state

control over insurance business. This amended insurance Act looked into

investments, expenditure and management of these companies.

By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and

75 provident societies carrying on life insurance business in India.

Insurance business flourished and so did scams, irregularities and dubious

investment

practices by scores of companies. As a result the government decided tonationalize the life assurance business in India. The Life Insurance

Corporation of India (LIC) was set up in 1956. The nationalization of life

insurance was followed by general insurance in 1972.


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TIME LINE IN INSURANCE

HISTORY

(MAJOR LANDMARKS)

1818 British introduced the life insurance to India with the Establishment

of the Oriental Life Insurance Company in Calcutta.

1850 Non life insurance started with Triton Insurance Company.

1870 Bombay Mutual Life Assurance Society is the first India owned life

insurer.

1912 The Indian Life Assurance Company Act enacted to regulate the life

insurance business.

1938 The Insurance Act was enacted.

1956 Nationalization took place. Government took over 245 Indian and

foreign insurers and provident societies.


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1972 Non-life business nationalized, General Insurance Corporation

(GIC) came into being.

1993 Malhotra committee was constituted under the chairmanship of

former RBI chief R. N. Malhotra to draw a blue print for insurance sector

reforms.

1994 Malhotra committee recommended reentry of private players.

1997 IRDA (Insurance Regulatory and Development Authority) was set

up as a regulator of the insurance market in India.

2000 IRDA started giving license to private insurers. ICICI Prudential,

HDFC were first private players to sell insurance Policies.

2001 Royal Sundaram was the first non-life private player to sell an

insurance policy.

2002 Bank allowed to sell insurance plans as TPAs enter the scene,

insurers start setting non-life claims in the cashless mode.


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RELIANCE LIFE

INSURANCE COMPANY

Reliance Life Insurance Company Limited is a part of Reliance

Capital Ltd., a part of Reliance Anil Dhirubhai Ambani Group.

Reliance Capital is one of India's leading private sector financial

services companies, which ranks among the top 3 private sector

financial services and banking companies. Reliance Life

Insurance is not onlyone of India's fastest growing life insurance

companies, but also counts among the top 4 private sector

insurers. In just 2 years, the Company has crossed the mark of

1.7 Million policies.

RLIC launched around 600 branches in 10 months, taking the

overall branch network above to 740. Reliance Life Insurance Co.

is one of the only two ISO 9001: 2000 certified Life Insurance

companies in India. It has been awarded with the Jamnalal Bajaj

Uchit Vyavahar Puraskar 2007- Ceritificate of Merit in the

Financial Services category by Council for Fair Business

Practices (CFBP). Given below is the list of the policies providedby Reliance Life Insurance Company:


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HISTORY

Reliance Capital Limited announced the launch of its lifeinsurance business on February 1, 2006. This was afterobtaining the required regulatory approvals from theRegistrar Of Companies and theInsurance Regulatory and Development Authority.

It was in August 2005 that the ball was set rolling whenRelianceCapital Limited, the financial arm of Reliance AnilDhirubhai

Ambani Group (ADAG) announced the requisition of100 % shareholding in AMP Sanmar Life InsuranceCompany Limited; andthe formal transfer of shares took place in October2005.The company will issue all policy contracts underthe Reliance Life Insurance Company limited name. Allthe existing policy contracts also stand transferred to theReliance Life Insurance entity with all the original

contractual terms and commitments intact.


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JOURNEY SO FAR

Anil Dhirubhai Ambani Group (ADAG) announces the

acquisition of 100 percent shareholding in AMP Sanmar LifeInsurance Co. Ltd.

Mr. Nandgopal participates in a one-day conference

onOptimising growth opportunities through Distribution Matrix:Emerging Bancassurance organized by the Asia Insurance Post at the

Taj President, Mumbai.

Rliance Life Insurance officially launched.

: Strategy meet at the Reliance Management

Institute. Amongst those who participate are the CEO, COO, FunctionalHeads, Regional Managers and Regional Sales Managers.

A Puja held at the Church gate office situated


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in Express Building, 4th Floor, 14 E Road, Mumbai.

Churchgate office inaugurated by Mr. Amitabh

Jhunjhunwala, Mr. Amitabh Chaturvedi and Mr. Nandgopal.

Shifting to the new premises at Churchgate commences.

The new office at Chennai, at the Trapezium, First Floor, #39,

Nelson Manickam Road, inaugurated by their CEO Mr. Nandgopal, Mr. KVSrinivasan and Mr. Sureshbabu also graced the occasion.

MISSION

The mission of Reliance Life Insurance Company Limited is to bethe best in every sphere- business results, customer care andemployee focus. The aim of the company is to Think Bigger andThink Better

CORE VALUES

Reliance Life Insurance Company Limited has some core values which arelisted as follows:

1) Result Oriented

2) Performance Driven

3) Customer Focused


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4) Learning and Development Oriented

5) Employee Centric

6) Informal and Fun

FUTURE PLANE Forty-four new branches to be opened across the country in the

coming months; and a pan India presence with 162 branches inthe coming year.

A state-of-the-art customer care centre will provide continuous,responsive services to the caller and promptly address queries,collate feedback and suggestions from the caller, who may be

bothprospective and existing clientele and from channel partnersin Chennai and Mumbai.

It will be launching additional products aimed at providingunparalleled service to its valued clientele.

HEAD OFFICE

Reliance Life Insurance Company Limited,The Trapezium,39, First Floor,Nelson Manickam Road,


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Chennai 600 029

BRANCHES

They have so many branches and substations in the India. They havearound160 branches in the India. And they have planned to open morebranchesacross the country in the coming months.

PRODUCT MIX


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1.TRADITIONAL PLANLife insurance products are designed to suit the requirementsof customers. Fundamentally the product provide for:

Risk cover


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Investment

Health cover

In every product, to a certain degree, risk cover is imperativefor it to fall under the category of insurance. Based on the coverage of theproduct, the premiums are calculated and the customer pays accordingly.

In order to suggest the right product, it is essential for an agent tounderstand the requirements of the customer well.

Reliance Life Insurance Company Limited has offered 9traditional plans to the customers, which are listed as follows:

1) Reliance Term Plan2) Reliance Whole Life Plan3) Reliance Child Plan4) Reliance Endowment Plan5) Reliance Special Endowment Plan6) Reliance Cash Flow Plan7) Reliance Credit Guardian Plan8) Reliance Special Credit Guardian Plan

Each of the above traditional plans is discussed as follows:1) Reliance Term plan: -

This insurance policy is designed for those who only want life cover for theprotection of their family, and do not wish to save for themselves. It canalso be useful to business firms that wish to provide financial security totheir business against the sudden loss of partners or valuable manpower.Sincethere is no saving element or bonus provision, the premium is verylow.Hence, this is a high-risk plan with a low premium.

Features: -

a) Purely a term plan

b) Entry age minimum 18 years and maximum 65 year

c) Maximum premium paying term is 30 year


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d) Loan facility N.A.

e) Maturity amount = Sum assured

2) Reliance Whole Life Plan: -

This insurance policy is designed for people who do not wish to avail of anybenefits themselves but wish to create an immediate estate to protect theirfamily by availing of insurance cover on their life at a very low cost.

Features: -

a) It is a whole life insurance policy with profits

b) Low cost life cover

c) Maturity age is 85 year or 99 years last birthday as chosen

d) Maturity amount = Sum assured + Vested bonus

e) Tax benefit is available

3) Reliance Child Plan: -

This insurance policy is designed for people who wish to save money for afuture time when there will be a recurring need for substantial amounts ofmoney. This is especially true when it comes to paying large sums ofmoney for higher education as and when your son or daughter is studying

to become an Engineer, a Doctor or specialize in some other field, or isperhaps planning to go abroad.This money is payable in equal installments over the last 4 years of thepolicy term.

Features: -


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I. Minimum entry age is 20 year and maximum 60 year

a) Minimum sum assured is Rs. 25,000.

b) Minimum premium paying term is 5 year and maximum 20 year

c) Tax benefit is available

d) Maturity amount = Four equal installment of sum insured in lastfour year plus vested bonus in the last year

e) Loan facility is available

4) Reliance Endowment Plan: -Reliance Life Insurances Reliance Endowment Plan is the key to all yourfinancial needs. It is an inexpensive and easy way to protect you, yourfamily or your business.

In a nutshell this plan will keep you financially prepared for all the specialoccasions in your life - your daughters wedding, your childs universityeducation or even a new office for your business - by eliminating theburden that a shortage of money creates.

In the event of your untimely death, Reliance Endowment Plan will alsoassist your loved ones through this difficult time by the financial supportthat it provides.

Reliance Endowment Plan also gives you the additional benefit ofparticipating in the companys profits, which you will receive at the end ofthe policy period.

Features: -

a) Entry age minimum is 5 year and maximum 65 year

b) Maturity age minimum is 18 year and maximum 75 year

c) Minimum premium paying term is 5 year and maximum 35year in case of regular and in case of single 15 year


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d) Minimum sum assured is Rs. 25,000 or as determined by theminimum premium

e) Maximum sum assured is Rs. 5,00,000 (entry age below 18

years and no limit for entry age 18 and above)

f) Premium mode annual, half yearly, quarterly and monthly(by salary deduction only)

g) Loan up to 90% of the surrender value of the policy

h) Maturity amount = Guaranteed sum assured + Reversionarybonus

5) Reliance Special Endowment Plan: -

This insurance policy is designed for people who wish to combine savingswith extended security. The unique feature of this policy is that lifeprotection continues for five years after you have stopped the payment ofpremium. Payment of sum assured at the end of premium paying term andextension of life cover thereafter for the full sum assured for a period of 5years, are characteristics of the policy.

This plan also participates in the profits.

Features: -

a) Entry age minimum 12 year and maximum 65 year

b) Minimum sum assured is Rs. 25,000

c) Minimum premium paying term is 10 year and maximum 40 yeard) Unique feature of this policy is that five year life protection

continues after you have stopped the payment of premium

e) Tax benefit is available

f) Under this policy bonus is compounded yearly


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g) Loan facility is available

h) Maturity amount = Full sum assured before maturity date +Vested bonus at the time of maturity date

6) Reliance Cash Flow Plan: -

This insurance policy is designed for those who have a recurring need forreinvestment in business or look for short-term investment channels. Theadvantage of the policy is that they need not part with a sizable amount ofmoney at any one time, but create, through regular premium payments, aperiodic return of lump sums which become available for reinvestment athigher returns, while providing simultaneously, substantial life cover.

Alternatively, it can be used to meet any immediate financial crisis in the

family like your son's college admission, your daughter's engagement, andrenovation of your home or perhaps, a holiday abroad.The money is payable in installments. The first installment is paid at theend of the 4th year and thereafter at the end of every 3rd year.

Features:-

a) Plan with profits

b) Minimum entry age is 15 year and maximum is 63 year

c) Maximum premium paying term is 34 year

d) Loan facility is not available

e) In case of death full sum assured + accrued bonuses up tothe date of death is payable immediately

f) In case of survival up to maturity date all premium paid

g) Rider accident death and critical illness

h) Mode of payment is available

7) Reliance Credit Guardian Plan: -


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This insurance policy is designed for those who not only safeguardsindividuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death.

Features: -

a) Loan protection against home, home improvement, twowheelers and four wheeler

b) In case of death remaining loan amount paid immediately

c) In case of survival no benefit is available

d) Premium payment option for single and regular is available

e) Premium paying term is 2/3 of loan period and remainingperiod paid by the company

8) Reliance Special Credit Guardian Plan: -

This insurance policy is designed for those who not only safeguards

individuals but also families and businesses from the financial hardship thatcould arise from unfortunate and unexpected death, disability or criticalillnesses.

Features: -

a) Loan protection against home, home improvement, twowheelers and four wheelers

b) In case of death remaining loan amount paid immediatelyc) In case of survival no benefit is available

d) Premium payment option for regular and single is available

e) Premium payment term is 2/3 of loan period and remainingperiod paid by the company


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f) Maturity amount = All the premium paid amount

g) Tax benefit is available

2.UNIT LINKED PLAN

A unit-linked policy is a life assurance policy in which the benefitsdepend on the performance of a portfolio of shares.


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Each premium paid by the insured person is split: a part is used toprovide life assurance cover, while the balance (after the deduction ofcosts, expenses, etc.) is used to buy units in a unit trust.

In this way, a small investor can benefit from investment in a managedfund without making a large financial commitment. As they are linked to thevalue of shares, unit linked policies can go up or down in value.Policyholders can surrender the policy at any time and the surrender valueI the selling price of the units purchased by the date of cancellation 9lessexpense). A small part of the contribution is used for providing life coverand the balance is invested in unit. Legal heirs are entitled to the amount ofinsurance cover and entitled units in case of death of the insured.

Reliance Life Insurance Company Limited has also offered the two

Unit Linked Plans, which are listed as follows:

1) Reliance Market Return Plan2) Reliance Golden Years Plan

Amongst the above plans the Reliance Market Return Plan is thelargest selling plan of the Reliance Life Insurance Company Limited. Theabove two ULIP plans are discussed as follows:

1) Reliance Market Return Plan: -Reliance Market Return Fund is the unit-linked product that helps youinvest in the financial markets in a combination of investment instrumentsof your choice. You can enjoy the returns from the markets without thetrouble of monitoring and managing your own investment portfolio andkeeping track of the market movements. At the same time your investmentpremiums provide you with insurance cover. Reliance Market Return Fundunit-linked insurance plan provides you with a basket of fund options thatbalances your return and risk exposure while providing life cover at thesame time.

Features: -

a) Minimum entry age is 30 days and maximum entry ageis 65 year

b) Maximum policy term 40 year and minimum policy


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term 5 year

c) Mode of premium as annual, quarterly, half yearly andmonthly Rs. 1000 (for salary deduction only) and Rs.2500 (standing order/credit card)

d) Top up premium minimum Rs. 2500

e) Option of investment fund

i. Capital secure 100% fixed interest securitiesii. Balanced minimum 80% fixed interest securities

and maximum 20% in equityiii. Equity 100% equityiv. Growth minimum 60% fixed interest securities and

maximum 40% in equity

f) Loan facility is not available

g) One switches every year free and subsequent switchescharged 1% of the amount switched

h) Partial withdrawals per year under regular and singlepremium options is 2 times

i) Lock in period till today is 3 yearj) Minimum unit account balance after each withdrawals

is Rs. 10,000

2) Reliance Golden Years Plan: -

Reliance Golden Years Plan.. The Reliance Life Insurance no-worry stayhappy retirement plan. Reliance Golden Years Plan is a flexible packagethat provides freedom of choice in choosing the type of investment, life

cover, vesting options such as commuting and annuity options.Contributions provide Income tax savings as well.

Reliance Golden Years Plan, a flexible pension product is available for allindividuals who are between the ages of 18 and 65.


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Features: -

a) Entry age minimum is 18 year and maximum 65 year

b) Minimum premium amount Rs. 10,000 and maximumis unlimited

c) Mode of premium payment is available

d) Pension plan with risk cover and without risk cover

e) Choice of investment

i. Capital secure fund 80% in equity and 20% in

government securityii. Balanced fund 80% in government and 20%

in equity

f) No loan facility is available

g) Tax benefit is available

h) Annuity options

i. Annuity payable for lifeii. Annuity payable for 5/10/15 years certain and

there after with lifeiii. Annuity payable for life with return of capital

on death of the annuitant

MARKETING DEPARTMENT


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1.DISTRIBUTION CHANNEL.


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This Reliance Life Insurance Company Limited is using five typesofdistribution channel, which are as follows:

1) Agency: -

Independent insurance agents represent a number ofcompanies and can research these companies products tofind the right combination for their clients. Independent agents &insurance producer groups are growing in prevalence. Althoughproducer groups are in their infancy, their emergence maypotentially be realignment in the distribution of financial services.

Independent shops realized that by pooling production and fundinga central support office, they had increased buyingpower.The one type of distribution channel, which Reliance LifeInsurance Co. Ltd is using, is an agencychannel works as follows:

2) Bank Assurance: -

While a lot of bank relationships with insurance companies


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have been established, life insurance sales have been slower thanone would expect he primary bank insurance activities have beenthe distribution of annuities, credit life, and direct marketinginsurance. Banks are failing to incorporate successful sales tactics

used to sell otherfinancial services like investments.

Another type of distribution channel is bank assurance. Thischannel is tie up with banks. In this channel the advisors using ortargeting the bank customers to make a business with them i.e., tosell the policy of the company.

3) Corporate:-

To gain a better understanding of the demand amongstindependent advisors for trust services and to gain a better feel forhow independent advisors handle trust services, a research wasperformed with independent advisors across several broker/dealersand custodians. The interviews revealed that demand is greatestfor living trusts among independent advisors, followed by demandfor corporate trustee services.

Another type of distribution channel is corporate, which arefor employee benefits. This channel is tie up with corporate or smallenterprises. Through these small enterprises, the advisors will sellthe products/policy to customers of the small enterprises.

4) Rural Benefits:-

Brokerage firms have gained much of the institutional andpersonal trust business lost by the banks. These firms havesteadily captured assets, primarily at the expense of the banks.The non-bank trust companies has increased in recent years asindependent trust companies have emerged and morebroker/dealers are integrated services. Insurance companies view


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full-service brokers as a potentially new distribution channel aswell.

Another type of distribution channel is rural benefits. This

channel works as a dealership. In this channel, the dealers will sellthe policy to the target customers.

5) Web World:-

Direct sales of life insurance are growing rapidly, but many ofthe traditional full-serve players seem to be letting it go. Across allfinancial services, consumers are expressing a willingness to deal

with a variety of providers on the web. Web sites are starting to popup offering consumer insurance products especially designed fordistribution over the web.

Another type of distribution channel is web world. This channelis tie up with customer database. In this channel, the advisors willsell the policy to the target customers, which are taken from thecustomer database, are listed in the website.

2. PROMOTIONAL PROGRAMMES &TARGET SEGMENT

Promotional programmes and target segment are related to eachother. The promotional programmes are made to motivate theadvisors/agentsand sales managers to do more business i.e., tosell the more policies. The Reliance Life Insurance Co. Ltd has


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made three promotional schemes, which are as follow: :


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Login: 1st April to 31st May 06

Issuance till 15th June 06

2) R.A.R.E.:-

The full form of R.A.R.E. is Reliance Advisors RewardExperience. This programs consists of

1. New Advisor Incentive Program2. Board of Advisors

3. Annual Discovery Series4. Advisor Career Progression5. RARE Club Loyalty Program

The above programs are described as follows1. R.A.R.E. Program New Advisor Incentives:-

Criteria

There will be two levels in the New Advisor IncentiveprogramA. Launch PadB. Take Off

2. R.A.R.E. Program Board of Advisors:-

CriteriaThere will be two levels in the Board of Advisors program

A. Time PeriodB. Parameters

3. R.A.R.E. Program Discovery Series:-

Criteria


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There will be six levels in the Discovery Series programA. Qualification periodB. Business criteriaC. The qualification criteria will be the same for both the Global

and the National Discovery SeriesD. Qualification for the Global Discovery SeriesE. Qualification for the National Discovery SeriesF. The top 150 will bb calculated based on WRP (Weighted RecdPremium)

4. R.A.R.E. Program Advisor Career Progression:-

Advisor Career ProgressionA. Business AssociateB. Sales Manager

5. R.A.R.E. Privilege Club:-

LevelsA. The RARE Club will have 6 different levels

B. The criteria for entry into each level will be based onI. Business (WRP)II. PersistencyIII. Product Mix

C. The qualification period isI. Logins from 1st Apr 06 to 31st Mar 07II. Issuances from 1st Apr 06 to 15th Apr 07

Qualification Criteria


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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September

1956 to spread the message of life insurance in the country and mobilise

peoples savings for nation-building activities. LIC with its central office in

Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai,

Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in

important cities and 2,048 branch offices. LIC has 5.59 lakh active agents

spread over the country.

The Corporation also transacts business abroad and has offices in Fiji,

Mauritius and United Kingdom. LIC is associated with joint ventures

abroad in the field of insurance, namely, Ken-India Assurance Company

Limited, Nairobi; United Oriental Assurance Company Limited, Kuala

Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It

has also entered into an agreement with the Sun Life (UK) for marketing

unit linked life insurance and pension policies in U.K.


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In 1995-96, LIC had a total income from premium and investments of $ 5

Billion while GIC recorded a net premium of $ 1.3 Billion. During the last

15 years, LIC's income grew at a healthy average of 10 per cent as

against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent

in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below

the poverty line, with 50 per cent subsidy in the premium rates. LIC's

claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher

than that of global average of 40 per cent. Compounded annual growth

rate for Life insurance business has been 19.22 per cent per annum

General Insurance Corporation of India

(GIC)

The general insurance industry in India was nationalized and a government

company known as General Insurance Corporation of India (GIC) was

formed by the Central Government in November 1972. With effect from 1

January 1973 the erstwhile 107 Indian and foreign insurers which were

operating in the country prior to nationalization, were grouped into four

operating companies, namely, (i) National Insurance Company Limited; (ii)

New India Assurance Company Limited; (iii) Oriental Insurance Company

Limited; and (iv) United India Insurance Company Limited. (However, with


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effect from Dec'2000, these subsidiaries have been de-linked from the

parent company and made as independent insurance companies). All the

above four subsidiaries of GIC operate all over the country competing with

one another and underwriting various classes of general insurance business

except for aviation insurance of national airlines and crop insurance which

is handled by the GIC.

Besides the domestic market, the industry is presently operating in 17

countries directly through branches or agencies and in 14 countries

through subsidiary and associate companies.

IN ADDITION TO ABOVE STATE INSURERS THE

FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO

INSURANCE BUSINESS: -

The introduction of private players in the industry has added to the colors

in the dull industry. The initiatives taken by the private players are very

competitive and have given immense competition to the on time

monopoly of the market LIC. Since the advent of the private players in the

market the industry has seen new and innovative steps taken by the

players in this sector. The new players have improved the service quality

of the insurance. As a result LIC down the years have seen the declining

phase in its career. The market share was distributed among the private


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players. Though LIC still holds the 75% of the insurance sector but the

upcoming natures of these private players are enough to give more

competition to LIC in the near future. LIC market share has decreased

from 95% (2002-03) to 82 %( 2004-05).

1. HDFC Standard Life Insurance Company Ltd.

HDFC Standard Life Insurance Company Ltd. is one of Indias leading private

life insurance companies, which offers a range of individual and group insurance

solutions. It is a joint venture between Housing Development Finance

Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and

The Standard Life Assurance Company, a leading provider of financial services

from the United Kingdom. Their cumulative premium income, including the first

year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-

Nov 2005. They have managed to cover over 11,00,000 individuals out of which

over 3,40,000 lives have been covered through our group business tie-ups.

2. .

Max New York Life Insurance Company Limited is a joint venture that brings together two

large forces - Max India Limited, a multi-business corporate, together with New York Life

International, a global expert in life insurance. With their various Products and Riders,


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there are more than 400 product combinations to choose from. They have a national

presence with a network of 57 offices in 37 cities across India.

3.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,

a premier financial powerhouse and Prudential plc, a leading international

financial services group headquartered in the United Kingdom. ICICI Prudential

was amongst the first private sector insurance companies to begin operations in

December 2000 after receiving approval from Insurance Regulatory Development

Authority (IRDA). The company has a network of about 56,000 advisors; as well

as 7 banc assurance and 150 corporate agent tie-ups.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between

Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

5.Birla Sun Life Insurance Company Ltd.


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Birla Sun Life Insurance Company is a joint venture between Aditya Birla

Group and Sun Life financial Services of Canada.

Tata AIG Life Insurance Company Ltd.

SBI Life Insurance Company Limited

ING Vysya Life Insurance Company Private Limited

Allianz Bajaj Life Insurance Company Ltd.

Metlife India Insurance Company Pvt. Ltd.

AMP SANMAR Assurance Company Ltd.

Dabur CGU Life Insurance Company Pvt. Ltd.

1. Royal Sundaram Alliance Insurance Company

The joint venture bringing together Royal & Sun Alliance Insurance and

Sundaram Finance Limited started its operations from March 2001. The

company is Head Quartered at Chennai, and has two Regional Offices,

one at Mumbai and another one at New Delhi.

2. Bajaj Allianz General Insurance Company Limited


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Bajaj Allianz General Insurance Company Limited is a joint venture between

Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of

expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

Development Authority (IRDA) certificate of Registration (R3) on May 2nd,

2001 to conduct General Insurance business (including Health Insurance

business) in India. The Company has an authorized and paid up capital of Rs 110

crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG,

Germany.

3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture

between ICICI Bank Limited and the US-based $ 26 billion Fairfax

Financial Holdings Limited. ICICI Bank is India's second largest bank,

while Fairfax Financial Holdings is a diversified financial corporate

engaged in general insurance, reinsurance, insurance claims management

and investment management.


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Lombard Canada Ltd, a group company of Fairfax Financial Holdings

Limited, is one of Canada's oldest property and casualty insurers. ICICI

Lombard General Insurance Company received regulatory approvals to

commence general insurance business in August 2001.

4. Cholamandalam General Insurance Company Ltd.

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a

joint venture of the Murugappa Group & Mitsui Sumitomo.

Chola-MS commenced operations in October 2002 and has issued more

than 1.4 lakh policies in its first calendar year of operations. The company

has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore,

Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi,

Chandigarh, Kolkata and Vizag.

Tata AIG General Insurance Company Ltd. is a joint venture company,

formed from the Tata Group and American International Group, Inc.

(AIG). Tata AIG combines the strength and integrity of the Tata Group

with AIG's international expertise and financial strength. The Tata Group


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holds 74 per cent stake in the two insurance ventures while AIG holds the

balance 26 per cent stake.

Tata AIG General Insurance Company, which started its operations in

India on January 22, 2001, offers the complete range of insurance for

automobile, home, personal accident, travel, energy, marine, property

and casualty, as well as several specialized financial lines.Kotak

6.Mahindra OLD Mutual: -

Kotak Mahindra OLD Mutual is a 74:26 join venture between Kotak

Mahindra bank and Old Mutual. It is a private sectorcompany. The

company was registered on 10/1/2001. The market share for FY

2005-06 was 1.11%.

7.Aviva Life Insurance India: -Aviva Life insurance is a 74:26 joint venture between Aviva andDabur. It is a private sector company. The company was registered

on 14/5/2002. The market share for FY 2005-06 was 1.14%.

8.ING Vysya Life insurance: -ING Vysya Life Insurance is joint venture between Exide(50%),Gujarat Cements (14.87%), Enam (9.13%) and ING (26 %). It is a


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private sector company. The company was registered on 2/8/2001.Themarket share for FY 2005-06 is 0.79%.

9.Met Life India: -Met Life India is a 74:26 joint venture between 74:26 JVbetween J & Bank, Pallonji & Co and MetLife. It is a private sectorcompany. The company was registered on 6/8/2001. The marketshare for FY 2005-06 was 0.40%.

10.Bajaj Allianz Life Insurance Co.: -Bajaj Allianz Life Insurance Company is a 74: 26 Joint venture

between Bajaj Auto limited and Allianz AIG. The company wasregistered on 3/8/2001. The market share for FY 2005-06 was7.56%.

11. SBI Life Insurance Company Ltd: -SBI Life Insurance Company is a 74: 26 Joint venture betweenSBI and Cardiff S.A. The company was registered on 31/3/2001.Itis a private sector company. The market share for FY 2005-06 was

2.31%.

12.Sahara India Life Insurance Company Ltd.: -First Wholly Indian Owned Private Life Insurance Company.The Company commenced operations from 30th October 2004.The market share for FY 2005-06 was 0.06 %.

13.Shriram life insurance company Ltd: -

Shriram Life is a recent entrant into the life insurance sectorIt is a 74:26 joint venture between the Shriram group through itsShriram Financial Holdings and Sanlam Life Insurance Limited,South Africa. The company expects to start operations soon.


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2. MARKET SHARE


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Now lets depict the market share of these players on

diagram

Here we can see from the diagram that LIC is the market leader

and it commands the major part of the total life insurance market.Its market share was approximately 98% before 2000 but after theentry of private players it has significantly decreased.


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Among private players Bajaj Allianz stands first. It has the marketshare of approximately 7.56% in the total market and it constitutes40% of the market share among private players.HDFC Standard comes third. SBI Life insurance Company Limited

comes fourth. ICICI Prudential is also one of the fastest growing lifeinsurance companies in India.

Rest of the players has market share below 2%.


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There are four fund options, which Reliance Life InsuranceCompany Limited has offered, which are as follows:

1) Capital Secure Fund:-

This fund is for Reliance Golden Years Plan, and RelianceMarket Return Plan.

In line with the objective of protecting the capital against anyerosion, 61.4% of the funds were invested in short-termGovernment Securities (Gilts) and to meet liquidity requirementhigher about 40% of funds are kept in short term bank deposits.

The net return credited to policyholders and the asset compositionratios are given in the boxes below.


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ASSET ALLOCATION


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2) Balanced Fund:-

This fund is for Reliance Golden Years Plan, and Reliance MarketReturn Plan.

To take advantage of the bullish trend in the equity market, theequity holdings in the fund was maintained as close as possible tothe maximum of 20% allowed for the fund. Bank deposits weremaintained only for the purpose of liquidity management. To reflecttheir bearish view on the debt market the duration of the fixedincome portfolio was kept low. Within the fixed income portfolio,allocation to Gilts was higher than corporate bonds. All the bondsin the portfolio are top rated. The asset composition,

the details of the portfolio and the net returns are disclosed below.


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3.GROWTH FUND

This fund is for Reliance Golden Years Plan, and Reliance MarketReturn Plan.

To take advantage of the bullish trend in the equity market, theequity holdings in the fund was maintained as close as possible tothe maximum of 20% allowed for the fund. To reflect their bearishview on the debt market the duration of the fixed income portfoliowas kept low. All the bonds in the portfolio are top rated. The assetcomposition, the details of the portfolio and the net returns aredisclosed below.


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4) Equity Fund:-

This fund is for Reliance Market Return Plan. In line with thestated asset allocation pattern and their view of the market, theentire corpus of the fund was invested in equities. Net returnsearned since inception and the full portfolio are disclosed below.


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78

3

10

7 2

LIC

REL

ICICI

SBI

HDFC


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78% of the people contacted prefer LIC policy to any other and therefore it is ranked

no.1 by that percent of respondents

55% of the respondents believe that covering future uncertainty is the biggest

benefit of an insurance policy.

55%

20%

25%Cover FutureUncertainty

Tax Deductions

Future Investment


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Whereas, 20% and 25% of them believe that the other benefits are Tax deduction

and future investments respectively.

15%

37%

7%

30%

11%

FEATURES OF INSURANCE POLICY

MONEY BACK GUAARENTEE

LARGER RISK COVERANCE

EASY ACCESS TO AGENTS

LOW PREMIUM

REPUTATION OF COMPANY


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

feature of the all.

0

81

74

100

0

0

S VING TOOL

T X S VING TOOL

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


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

device.

But 100% of the respondents are with the view that Insurance is a tool to protect

your family.

70%

30%

Yes

No


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Of the sample size of 400 surveyed respondents 70% of the respondents are having

Insurance policy.

30% of the respondents are either not having any Insurance policy at present or

their policy is already matured.

And at present 100% of the respondents are with the view that Insurance is a tool

to protect your family.

55%

45%

Customer approached Insurance company/Agent

Company/agent approached customer


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44.5% of the respondents approached the Insurance Company / Agent.

Whereas, 55.5% of the respondents were approached by the Company /Agent.

0%

40%

60%

Satisfied Not satisfied Not Responded


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

80.71% of the Respondents opted for saving / Investments. But all of them, i.e.

100% of the respondents have opted for insurance for their family protection

80

100

80

Slice 1 Slice 2 Slice 3


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

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

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

0%

40%

60%

Satisfied Not satisfied Not Responded


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45% of the respondents are satisfied with their existing service agent. 55% of the respondents

are not satisfied with their existing insurance agent.

55.00%45.00%

Satisfied Not satisf ied


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All of those who have taken a policy have responded.

0%

100%

Paying tax Not paying tax

55.00%45.00%

Satisfied Not satisfied

33

32

25

2151

LIC NSC BOND PPF PF EPF


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

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

All of those who have taken a policy have responded.

33

32

25

2151

LIC NSC BOND PPF PF EPF


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29% of the respondents are with the view that insurance should be bought after

the age of 25 years.

10.5% of the respondents are with the view that insurance should be buyed after

the age of 35 years.

Whereas, 60.5% of the respondents are with the view that buying of insurance do

not have any thing to do with age i.e. there is no age limitations. It can be purchased any

time according to the need.


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2926

24

10 0

Inflexible plans Non user friendlyUnsatisfactory services Non AggressiveSatisfactory GoodVery good


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CONCLUSION


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Our exhaustive research in the field of Life Insurance threw up some

interesting trends which can be seen in the above analysis. A general

impression that we gathered during Data collection was the immense

awareness and knowledge among people about various companies and

their insurance products. People are beginning to look beyond LIC for

their insurance needs and are willing to trust private players with their

hard earned money.

People in general have been impression by the marketing and

advertising campaigns of insurance companies. A high penetration of

print , radio and Television ad campaigns over the years is beginning to

have its impact now.

The general satisfaction levels among public with regards to policy and

agents still requires improvement. But therein lays the opportunity for a

relative new comer like ING. LIC has never been known for prompt

service or customer oriented methods and Reliance can build on these

factors


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QUESTIONNAIRE


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1. ARE YOU EMPLOYED?YES NO

If YES, only then proceed

2. DO YOU HAVE ANY INSURANCE POLICY?

YES NO

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE BOTH

4. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE

COVER?(RANK THEM)

a) COVER FUTURE UNCERTAINITY ..

b) TAX DEDUCTIONS ..

c) FUTURE INVESTMENT ...

d) ANY OTHER ...

5.WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT?(RANK THEM)

a) LOW PREMIUM

b) LARGER RISK COVERANCE

c) MONEY BACK GUARNTEE

d) REPUTATION OF COMPANY

e) EASY ACCESS TO AGENTS ...


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f) ANY OTHER

6. DO YOU REALLY THINK INSURANCE POLICY COVER IN

TODAYS SCENARIO IS NOT ESSENTIAL?

.

7.. WHATS YOUR PERCEPTION ABOUT INSURANCE?

(RANK THEM)

a) A SAVING TOOL ..

b) A TAX SAVING DEVICE ..c) A TOOL TO PROTECT FUTURE .

8..AREYOU SATISFIED WITH THE POLICY?

a) SATISFIED SAVING TOOL ..

b) NOT SATISFIED ..

c) NOT RESPONDING

9. ARE YOU SATISFIED WITH THE SERVICE AGENT?

a) SATISFIED SAVING TOOL

b) NOT SATISFIED

c) NOT RESPONDING

10 DO YOU PAY TAXES?

YES NO.


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11. WHAT DO YOU INTENT TO GAIN FROM INVESTMENTS?

a) SAVING & RETURNS .

b) SECURITY .

c) TAX BENEFITS .

12. WHATS THE RIGHT AGE TO BUY INSURANCE?

a) AFTER 25 Yrs ..

b) AFTER 35 Yrs ..

c) AFTER 45 Yrs ..

d) ANYTIME ..

.

PLANNING NOT PLANING


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BIBLIOGRAPHY


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1. BOOKS/MAGAZINES REFFERED:

STUDY GUIDE- PRINCILES & PRACTICES OF LIFE /

GENERALINSURANCE, by AIMA.

Books published by INSURANCE INSTITUTE OF INDIA

LIFE-INSURANCE, by Mc GILL

INSURANCEWATCH.

MONEYOUTLOOK.

2. WEBSITES REFFERED:

WWW.RELIANCELIFE.CO.IN

WWW.CIFAI

NSURANCE.COM

WWW.MONE

YOUTLOOK.COM

WWW.INSUR

ANCE.IND.COM

3. REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE

INDUSTRY. Dec2005.

BRIEF PROFILE OF LIC, INDIADec 2006.

REPORT: COPING WITH COMPETITIONJan2007
http://www.cifainsurance.com/http://www.cifainsurance.com/http://www.cifainsurance.com/http://www.moneyoutlook.com/http://www.moneyoutlook.com/http://www.insurance.ind.com/http://www.insurance.ind.com/http://www.cifainsurance.com/http://www.cifainsurance.com/http://www.moneyoutlook.com/http://www.moneyoutlook.com/http://www.insurance.ind.com/http://www.insurance.ind.com/


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Documents

Project File Amar Bana