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DIVYA GUPTA 1
Summer Training Project Report
(MBA – 035)
ON
“A STUDY ON COMPARISON OF CUSTOMER SATISFACTION
BETWEEN RELIANCE LIFE INSURANCE & LIFE INSURANCE
CORPORATION”
Submitted in partial fulfillment of
Master of Business Administration (MBA)
Programme : 2013-15
of
Uttar Pradesh Technical University, Lucknow
SUBMITTED BY
DIVYA GUPTA
MBA – 3rd SEMESTER
Roll No-1301470012
Faculty of Management Science
DIVYA GUPTA 2
DIVYA GUPTA 3
CERTIFICATE
This is to certify that Ms. Divya Gupta, a regular student of MBA 2013 Batch has
undergone Summer Training in RELIANCE LIFE INSURANCE, LUCKNOW on the
topic of A STUDY ON “COMPARISON OF CUSTOMER SATISFACTION OF
RELIANCE LIFE INSURANCE & LIFE INSURANCE CORPORATION” for a
period of 4 weeks commencing from 18 June to 19 July 2014.
This Summer Training Project Report embodies the facts and figure collected and
interpreted by him/her during the course of Training.
This Certificate is issued by the undersigned on the basis of the Summer Training
Certificate of the organization in which the student completed the Summer Training
during above period.
Dr. Deepesh Tiwari
Asst. Prof. SRMSCET
Bareilly
DIVYA GUPTA 4
DECLARATION
This is to declare that I DIVYA GUPTA student of M.B.A in Shri Ram Murti Smarak
College of Engineering and Technology, U.P. have given original data and information
to best of my knowledge in the report entitled “A study on comparison of Customer
Satisfaction between Reliance Life Insurance & Life Insurance Incorporation”
I further state that no part of this information has been used for any assignment but for
partial fulfillment of the requirements towards the completion of the above mentioned
course.
DIVYA GUPTA
DIVYA GUPTA 5
ACKNOWLEDGEMENT
I, Divya Gupta, a student of MBA IIIrd Semester, sincerely thank Mr. DevMurti,
the Chairman of Shri Ram Murti Smarak College of Engineering and Technology,
Bareilly for being associated with this reputed Institute for my MBA studies.
I am grateful and wish to place on record my sincere thanks to Dr. Anant K.
Srivastava, Head of Management Department, for the leadership and guidance
and Dr. Deepesh Tiwari (Faculty Mentor) for the moral, academic and problem
solving support without which this project report would not have come up to its
present form. At this point of time I would not forget Mr. NeerajBajpai, Branch
Manager, Reliance Life Insurance, Lucknow .
Last but not the least, I would also like to thank my colleagues and staff of the
MBA department and employees of this elite Institute for whatever they have done
for helping me out every time in completion of this project report.
I would also like to extend a vote of thanks to all those people and the websites
who guided or directed me in bringing this project to the reality. Without their
guidance and proper support this project report would not have been possible for
me to prepare.
DIVYA GUPTA
DIVYA GUPTA 6
EXECUTIVE SUMMARY
This project report gives its readers the insight about the comparison of Reliance
Life Insurance & Life Insurance Corporation. The project can be a source of
providing information about contact details, organizational structure and hierarchy
of Reliance Life Insurance, its working, what are the Business processes the firm
has adopted in order to deliver the services in ways that satisfy their clients to
maximum, what the firm’s achievements, strengths, weaknesses, opportunities and
threats are, what are the marketing strategies adopted by the firm, how the firm has
grown since its inception in 1912, what kind of Insurance Plans they are
providing.
The research report has two sections in its first section company and industry
profile is given, whereas second Research Methodology is given which includes
samples design, analysis on sample and presentation is in the form of diagram and
charts.
Finally some suggestions with respect to the survey for the future improvement is
given to improve the survey because their competitors have also taken up the
surveys.
At the end of the report limitations, SWOT analysis, conclusion of the research
and Appendix which includes questionnaire related to Comparison of customer
Satisfaction.
DIVYA GUPTA 7
CONTENTS
PART-A
Chapter 1 Genesis of the Organization 11-12
Chapter 2 Profile of the organization 13-32
Chapter 3 Functional Areas i.e HRM, Marketing, FM,
Production/Operations etc.
33-49
Chapter 4 Organization Structure & hierarchy 50-51
Chapter 5 Product/ Services 52-67
Chapter 6 Achievements 68-68
Chapter 7 Comparative performance of the Organization 69-73
Chapter 8 SWOT Analysis 74-75
PART- B
Chapter 1 Introduction of the topic 76-82
Chapter 2 Scope & Objective(s) of the study 83-84
Chapter 3 Research design 85-86
Chapter 4 Data Analysis & Interpretation 87-97
Chapter 5 Findings, Recommendations & Limitations 98-101
Annexure 102-105
Bibliography 106
DIVYA GUPTA 8
List of Tables
S.No. Page No.
1 Awareness of Insurance Policy
87
2 Reasons of not taking Insurance Policy
88
3 Age group wise Insurance holder
89
4 Income wise Insurance holder
90
5 Purpose of buying Insurance policy
91
6 Most preferred Insurance Company among Customers
92
7 Which type of Insurance plan they are taking?
93
8 Satisfaction level of customers with the return on investment on policy
94
9 Satisfaction level regarding:
Easy accessibility Easy of e-services
Fair treatment Claim settlement procedure
95
DIVYA GUPTA 9
Chapter 1
Genesis of the Organization
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the
Reliance - ANIL DHIRUBHAI AMBANI Group. Reliance Capital is one of India’s
leading private sector financial services companies, and ranks among the top 3 private
sector financial services and banking companies, in terms of net worth. Reliance Capital
has interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services.
Yet, nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And this
part of the population is also subject to weak social security and pension systems with
hardly any old age income security. This itself is an indicator that growth potential for the
insurance sector is immense.
1.1 CORPORATE OBJECTIVE
At Reliance Life Insurance, we strongly believe that as life is different at every stage, life
insurance must offer flexibility and choice to go with that stage. We are fully prepared
and committed to guide you on insurance products and services through our well-trained
advisors, backed by competent marketing and customer services, in the best possible
way.
DIVYA GUPTA 10
1.2 CORPORATE VISION AND MISSION
Vision
Empowering everyone live their dreams
Mission
Create unmatched value for everyone through dependable, effective, transparent and
profitable life insurance and pension plans.
Our Goal
Reliance Life Insurance would strive hard to achieve the 3 goals mentioned
below:
Emerge as transnational Life Insurer of global scale and standard
Create best value for Customers, Shareholders and all Stake holders
Achieve impeccable reputation and credentials through best business practices
DIVYA GUPTA 11
CHAPTER 2
PROFILE OF THE COMPANY
RELIANCE LIFE INSURANCE CO. LTD.
Few men in history have made as dramatic a contribution to their country’s economic
fortunes as did the founder of Reliance, Shri. DHIRUBHAI AMBANI. Fewer still have
left behind a legacy that is more enduring and timeless.
As with all great pioneers, there is more than one unique way of describing the
true genius of DHIRUBHAI: The corporate visionary, the unmatched strategist,
the proud patriot, the leader of men, the architect of India’s capital markets, the
champion of shareholder interest.
But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth
creator. In one lifetime, he built, starting from the proverbial scratch, India’s
largest private sector enterprise.
When Dhirubhai embarked on his first business venture, he had a seed capital of
barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he
converted this fledgling enterprise into an Rs 60,000 crore colossus—an
achievement which earned Reliance a place on the global Fortune 500 list, the
first ever Indian private company to do so.
Dhirubhai is widely regarded as the father of India’s capital markets. In 1977,
when Reliance Textile Industries Limited first went public, the Indian stock
market was a place patronized by a small club of elite investors which dabbled in
a handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time retail
investors to participate in the unfolding Reliance story and put their hard-earned
money in the Reliance Textile IPO, promising them, in exchange for their trust,
DIVYA GUPTA 12
substantial return on their investments. It was to be the start of one of great stories
of mutual respect and reciprocal gain in the Indian markets.
Under Dhirubhai extraordinary vision and leadership, Reliance scripted one of the
greatest growth stories in corporate history anywhere in the world, and went on to
become India’s largest private sector enterprise.
Throughout this amazing journey, Dhirubhai always kept the interests of the
ordinary shareholder uppermost in mind, in the process making millionaires out of
many of the initial investors in the Reliance stock, and creating one of the world’s
largest shareholder families.
2.1 RELIANCE CAPITAL
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the
Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading
private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services.
Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)
registered with the Reserve Bank of India under section 45-IA of the Reserve
Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing financial services
sector in India and aims to become a dominant player in this industry and offer
fully integrated financial services.
Reliance Life Insurance is another step forward for Reliance Capital Limited to
offer need based Life Insurance solutions to individuals and Corporate.
DIVYA GUPTA 13
Reliance capital entered into the life insurance business by acquiring AMP Sanmar in
October 2005. The business was thereafter renamed Reliance Life Insurance. Today
RLIC has over 20 products - 16 individual plans and 4 employee benefit plans - including
the two new innovative products – Connect to Life and Reliance Money Guarantee Plan -
that were launched recently.
Reliance Life Insurance Company (RLIC) has been accorded the ISO 9001-2000
certificate for its best-in-class management systems in Quality, Customer & Process
orientation.
With this, RLIC is one of the only two life insurance companies in India to get ISO
9001:2000 certifications covering all functional areas.
The scope of the certification covers the entire gamut of business processes ranging from
product design, sales - front-end and back-end operations, customer care and investment,
to all business support functions. The certification has been awarded by internationally
acclaimed Bureau VERITAS and is valid till 2010 subject to continued satisfactory
operation of RLIC's Quality Management System.
"This certification is a significant milestone in our continuous quest to offer innovative
products, outstanding services and improved customer satisfaction. It indicates that we
have been able to install systems, processes & performance measures that are in line with
the best in the industry and will form the basis of our business growth in future", said P
Nanda gopal, CEO, Reliance Life Insurance Company.
Reliance Life Insurance is the fastest growing life insurance company in India and has an
incremental market share of 4 per cent amongst private insurers. The company has third
largest distribution network in terms of number of agents operating out of 143 locations
across the country.
DIVYA GUPTA 14
2.2 OVERVIEW OF INSURANCE SECTOR
With largest number of life insurance policies in force in the world, Insurance happens to
be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent
annually and presently is of the order of Rs. 450 billion. Together with banking services,
it adds about 7 per cent to the country’s GDP. Gross premium collection is nearly 2 per
cent of GDP and funds available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And this
part of the population is also subject to weak social security and pension systems with
hardly any old age income security. This it is an indicator that growth potential for the
insurance sector is immense.
A well-developed and evolved insurance sector is needed for economic development as it
provides long-term funds for infrastructure development and at the same time strengthens
the risk taking ability. It is estimated that over the next ten years India would require
investments of the order of one trillion US dollar. The Insurance sector, to some extent,
can enable investments in infrastructure development to sustain economic growth of the
country.
Insurance is a federal subject in India. There are two legislations that govern the sector-
The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has
come a full circle from being an open competitive market to nationalization and back to a
liberalized market again. Tracing the developments in the Indian insurance sector reveals
the 360-degree turn witnessed over a period of almost two centuries.
Indian Insurance Industry: Insurance may be described as a social device to reduce or
eliminate risk of life and property. Under the plan of insurance, a large number of people
associate themselves by sharing risk, attached to individual.
The risk, which can be insured against include fire, the peril of sea, death, incident, &
DIVYA GUPTA 15
burglary. Any risk contingent upon these may be insured against at a premium
commensurate with the risk involved.
Insurance is actually a contract between 2 parties whereby one party called insurer
undertakes in exchange for a fixed sum called premium to pay the other party happening
of a certain event.
Insurance is a contract whereby, in return for the payment of premium by the insured, the
insurers pay the financial losses suffered by the insured as a result of the occurrence of
unforeseen events.
With the help of Insurance, large number of people exposed to a similar risk make
contributions to a common fund out of which the losses suffered by the unfortunate few,
due to accidental events, are made good
Potential Largely untapped market: 17% of the world’s population
Nearly 80% of the Indian population is without Life, Health and Non-life
insurance
Life insurance penetration is low at 4.1% in 2006-07
Non-life penetration is even lower at 0.6% in 2006-07
The per capita spend on life and non- life insurance is US$33.2 and US$5.2
(2006-07), respectively compared to a world average of US$330 and
US$224
Strong economic growth with increase in affluence and rising risk
awareness leading to rapid growth in the Insurance sector
Innovative products such as Unit Linked Insurance Policies are likely to
drive future industry growth
Investment opportunities exist in both Life and Non-life segments
Total estimated investment opportunity of US$14-15 billion
DIVYA GUPTA 16
2.3 POLICY
FDI up to 26% is permitted under the automatic route subject to obtaining a license from
the Insurance Regulatory and Development Authority (IRDA). Plans to increase FDI up
to 49%.
Insurance Regulatory Development Authority (IRDA) is the regulator for the Insurance
industry.
In a landmark move the government de tariffed the General Insurance business on 1st
January 2007.
What is Life Insurance?
Life insurance is a guarantee that your family will receive financial support, even in your
absence. Put simply, life insurance provides your family with a sum of money should
something happen to you. It thus permanently protects your family from financial crises.
In addition to serving as a protective cover, life insurance acts as a flexible money-
saving scheme, which empowers you to accumulate wealth-to buy a new car, get your
children married and even retire comfortably.
Life insurance is a contract that pledges payment of an amount to the person assured (or
his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:-
The date of maturity, or
Specified dates at periodic intervals, or
Unfortunate death, if it occurs earlier
DIVYA GUPTA 17
The functions of Insurance can be bifurcated into two parts:
1. Primary Functions
2. Secondary Functions
3. Other Functions
The primary functions of insurance include the following:
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. Insurance is actually a protection against
economic loss, by sharing the risk with others.
Collective bearing of risk - Insurance is a device to share the financial loss of few
among many others. 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.
Assessment of risk - Insurance determines the probable volume of risk by evaluating
various factors that give rise to risk. Risk is the basis for determining the premium rate
also
Provide Certainty - Insurance is a device, which helps to change from uncertainty to
certainty. Insurance is device whereby the uncertain risks may be made more certain.
The secondary functions of insurance include the following:
Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable
device to prevent unfortunate consequences of risk by observing safety instructions;
installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesser
payment to the assured by the insurer and this will encourage for more savings by way of
DIVYA GUPTA 18
premium. Reduced rate of premiums stimulate for more business and better protection to
the insured.
Small capital to cover larger risks - Insurance relieves the businessmen from security
investments, by paying small amount of premium against larger risks and uncertainty.
Contributes towards the development of larger industries - Insurance provides
development opportunity to those larger industries having more risks in their setting up.
Even the financial institutions may be prepared to give credit to sick industrial units
which have insured their assets including plant and machinery.
2.4 Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from. Modern
day investments include gold, property, fixed income instruments, mutual funds and of
course, life insurance. Given the plethora of choices, it becomes imperative to make the
right choice when investing your hard-earned money. Life insurance is a unique
investment that helps you to meet your dual needs - saving for life's important goals, and
protecting your assets.
LET US LOOK AT THESE UNIQUE BENEFITS OF LIFE INSURANCE IN DETAIL.
Asset Protection
From an investor's point of view, an investment can play two roles - asset appreciation or
asset protection. While most financial instruments have the underlying benefit of asset
appreciation, life insurance is unique in that it gives the customer the reassurance of asset
protection, along with a strong element of asset appreciation.
The core benefit of life insurance is that the financial interests of one’s family remain
protected from circumstances such as loss of income due to critical illness or death of the
policyholder. Simultaneously, insurance products also have a strong inbuilt wealth
DIVYA GUPTA 19
creation proposition. The customer therefore benefits on two counts and life insura nce
occupies a unique space in the landscape of investment options available to a customer.
Goal based savings
Each of us has some goals in life for which we need to save. For a young, newly married
couple, it could be buying a house. Once, they decide to start a family, the goal changes
to planning for the education or marriage of their children. As one grows older, planning
for one's retirement will begin to take precedence.
Clearly, as your life stage and therefore your financial goals change, the instrument in
which you invest should offer corresponding benefits pertinent to the new life stage.
Life insurance is the only investment option that offers specific products tailor-made for
different life stages. It thus ensures that the benefits offered to the customer reflect the
needs of the customer at that particular life stage, and hence ensures that the financial
goals of that life stage are met.
The table below gives a general guide to the plans that are appropriate for different life
stages.
DIVYA GUPTA 20
Life Stage Primary Need
Life Insurance
Product
Young &
Single
Asset creation Wealth creation plans
Young &
Just married
Asset creation &
protection
Wealth creation and
mortgage protection
plans
Married
With kids
Children's
education,
Asset creation
and protection
Education insurance,
mortgage protection &
wealth creation plans
Middle aged
with grown up
kids
Planning for
retirement &
asset protection
Retirement solutions &
mortgage protection
Across all lif-
stages Health plans Health Insurance
DIVYA GUPTA 21
2.5 HISTORY OF INDIAN INSURANCE INDUSTRY
The insurance sector in India has come a full circle from being an open competitive
market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360-degree turn
witnessed over a period of almost 190 years.
The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in India are
1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
1928 - The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938 - Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956 - 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 crore from the Government of India.
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.
DIVYA GUPTA 22
Some of the important milestones in the general insurance business in India are:
1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of general insurance business.
1957 - General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices.
1968 - The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972 - The General Insurance Business (Nationalization) Act, 1972 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.
Before insurance sector was opened to the private sector Life Insurance Corporation
(LIC) was the only insurance company in India. After the opening up of Insurance sector
in India there has been a glut of insurance companies in India. These companies have
come up with innovative and flexible insurance policies to cater to varying needs of the
individual. Opening up of the Insurance sector has also forced the LIC to tighten up its
belt and deliver better service. All in all it has been a bonanza for the consumer.
The life insurance business in India started since 1818. Till 1956, the insurance
business was mixed and decentralized. In 1956, the life insurance business of all
companies was nationalized and a single monolithic organization, the Life
Insurance Corporation of India (LIC), was set up. The Insurance Regulatory and
Development Authority (IRDA) Bill was passed by Indian parliament in December
DIVYA GUPTA 23
1999. The IRDA become a statutory body in April 2000 and has been framing
regulations and restrictions the private sector insurance companies.
The insurance sector was opened up to the private sector in August 2000. Consequently,
some Indian and foreign private companies have entered the insurance business. There
are about 16 life insurance companies operating in the private sector in India.
The insurance sector in India has come a full circle from being an open competitive
market to nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost two centuries.
DIVYA GUPTA 24
2.6 ABOUT THE INDUSTRY
With an annual growth rate of 15-20% and the largest number of life insurance policies
in force, the potential of the Indian insurance industry is huge. Total value of the Indian
insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to
government sources, the insurance and banking services' contribution to the country's
gross domestic product (GDP) is 7% out of which the gross premium collection forms a
significant part. The funds available with the state-owned Life Insurance Corporation
(LIC) for investments are 8% of GDP.
Till date, only 20% of the total insurable population of India is covered under various life
insurance schemes, the penetration rates of health and other non- life insurances in India is
also well below the international level. These facts indicate the of immense growth
potential of the insurance sector.
The year 1999 saw a revolution in the Indian insurance sector, as major structural
changes took place with the ending of government monopoly and the passa ge of the
Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry
restrictions for private players and allowing foreign players to enter the market with some
limits on direct foreign ownership.
Though, the existing rule says that a foreign partner can hold 26% equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have
poured into the Indian market and 21 private companies have been granted licenses.
Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected.
DIVYA GUPTA 25
Indians, who had always seen life insurance as a tax saving device, are now suddenly
turning to the private sector and snapping up the new innovative products on offer.
The life insurance industry in India grew by an impressive 36%, with premium income
from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff
competition from private insurers. This report "Indian Insurance Industry: New Avenues
for Growth 2012", finds that the market share of the state behemoth, LIC, has clocked
21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in
2004-05. But this was still not enough to arrest the fall in its market share, as private
players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in
2003-04
Though the total volume of LIC's business increased in the last fiscal year (2004-2005)
compared to the previous one, its market share came down from 87.04 to 78.07%. The 14
private insurers increased their market share from about 13% to about 22% in a year's
time. The figures for the first two months of the fiscal year 2005-06 also speak of the
growing share of the private insurers. The share of LIC for this period has further come
down to 75 percent, while the private players have grabbed over 24 percent.
There are presently 12 general insurance companies with four public sector companies
and eight private insurers. According to estimates, private insurance companies
collectively have a 10% share of the non-life insurance market.
DIVYA GUPTA 26
2.7 Indian Insurance Sector
The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972,
Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related
Acts.
Life Insurance Corporation of India (LIC):
Life Insurance Corporation of India (LIC) was formed in September, 1956 by an Act of
Parliament, viz., Life Insurance Corporation Act, 1956, with capital contribution from the
Government of India. Then the Finance Minister, Shri C.D. Deshmukh, while piloting the
bill, outlined the objectives of LIC thus: to conduct the business with the utmost
economy, in a spirit of trusteeship; to charge premium no higher than warranted by strict
actuarial considerations; to invest the funds for obtaining maximum yield for the policy
holders consistent with safety of the capital; to render prompt and efficient service to
policy holders, thereby making insurance widely popular.
Since nationalization, LIC has built up a vast network of 2,048 branches, 100 divisions
and 7 zonal offices spread over the country. The Life Insurance Corporation of India 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. The
Corporation has registered a joint venture company in 26th December, 2000 in
Kathmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limited in
collaboration with Vishal Group Limited, a local industrial Group. An off-shore company
L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap the African
insurance market.
DIVYA GUPTA 27
Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor
R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction. The Malhotra committee was set up with the objective of
complementing the reforms initiated in the financial sector. The reforms were aimed at
“creating a more efficient and competitive financial system suitable for the requirements
of the economy keeping in mind the structural changes currently underway and
recognizing that insurance is an important part of the overall financial system where it
was necessary to address the need for similar reforms…”.In 1994, the committee
submitted the report and some of the key recommendations included:
i) 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
ii) 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. 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.
DIVYA GUPTA 28
iii) 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.
iv) 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).
v) 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 crore. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their performance and enable them
to act as independent companies with economic motives. For this purpose, it had
proposed setting up an independent regulatory body.
DIVYA GUPTA 29
2.8 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.
Duties, Powers and Functions of IRDA
Section 14 IRDA Act, 1999 lays down the duties, powers and functions of IRDA:-
1. The Authority has the duty to regulate, promote and ensure orderly growth of the
Insurance business and re- insurance business.
2. This Include -
a) Issue to the applicant a certificate of registration, renew, modify, Withdraw,
suspend or cancel such registration
b) Protection of interests of the policy holders in matter concerning assigning Of
policy, nomination by policyholders, insurable interest, settlement of insurance
claim, surrender value of policy and condition of contracts of insurance.
c) Specifying the code of conduct and practical training
DIVYA GUPTA 30
For intermediary or insurance intermediaries and agents
d) Specifying the code of conduct for surveyors and loss assessors
e) Promoting efficiency in the conduct of insurance business
f) Promoting and regulating professional organization connected with insurance and
reinsurance business.
g) Levying fees and other charges for carrying out the purposes of this act.
h) Calling from information from, undertaking inspection of, conducting enquiries
and investigation including audit of the insurers, intermediaries and other
organization connected with the insurance business
i) Control and regulation of the rates, advantages, terms and condition
j) Specifying the form and manner in which books of accounts shall be maintained
and statement of account shall be rendered by insurers and other intermediaries.
k) Regulating investment of funds by insurance companies.
l) Regulating maintenance of margin of solvency.
m) Adjudication of disputes between Insurers and intermediaries or insurance
intermediaries.
n) Supervising the functioning of the Tariff Advisory Committee.
o) Specifying the % of Premium, Income of the insurer to finance schemes for
promoting and regulating professional organizations
Specifying the % of Life Insurance Business and general Insurance Business to be
undertaken by the Insurer in the rural or social sector
DIVYA GUPTA 31
CHAPTER 3
FUNCTIONAL AREAS
They are providing following areas or departments:
1) Under Writing
2) Actuarial
3) Insurance Operations
4) Customer Service
5) Quality and Processes
6) Human Resources
7) Finance
8) Marketing
DIVYA GUPTA 32
3.1 HUMAN RESOURCE MANAGEMENT
RECRUITMENT
Recruitment is the process of finding and attracting capable applicants for employment.
The process begins when new recruits are sought and ends when their applications are
submitted. The result is a pool of applicants from which new employees are selected.
In this company the Sales Manager, who recruits the advisors/agents for selling the
products of the company, does the recruitment. The advisors should have at least passed
the S.S.C. examination. They must pass the pre-recruitment examination, which is
conducted by the Insurance Institute of India, Mumbai, or any other approved
examination body. After clearing the examination the code will be provided to them and
the license will also be given to them, the validity the license would be 3 years. After all
these requirements, the person will become an insurance advisor in the company.
SELECTION
Selection is the process of picking individuals (out of the pool of job applications) with
requisite qualifications and competence to fill job in the organization. In simple words, it
is the process of differentiating between applicants in order to identify the se with a
greater likelihood of success in a job.
The Branch Manager, which includes-, will conduct the process of selection of Sales
Manager
DIVYA GUPTA 33
1) Personal Interview: -
The first step of selection of Sales Manager in the Reliance Life Insurance Company
Limited is to conduct a personal interview of an applicant by the Branch Manager.
2) Project 40 Interview: -
After clearing the personal interview, the project 40 interview will be taken by the
Branch Manager. In this step, the applicant should have to make a list of 40 and then start
the business with them.
3) Interview with Regional Head: -
After clearing the project 40 interview, the applicant should be interviewed by the
Regional Head, who will check his/her performance.
4) Negotiation: -
After clearing the interview with Regional Head, the negotiation will be provided to the
applicant.
5) Medical Examination: -
After that, the medical checkup should be made to the applicant.
6) Selection: -
After clearing all the above steps the applicant should be appointed/selected as a Sales
Manager in the company.
DIVYA GUPTA 34
TRAINING AND DEVELOPMENT:-
Training and Development is any attempt to improve current or future employee
performance by increasing an employee’s ability to perform through learning usually by
changing the employee’s attitude or increasing his/her skills and knowledge. The need for
training and development is determined by the employee’s performance deficiency,
computed as follows.
DIVYA GUPTA 35
Training & Development = Standard Performance – Actual Performance
They are providing 100 hours training to their advisors, who are newly recruited. They
are also providing the product training to their advisors and Sales Managers, who are
newly recruited. The 100 hours training is to be conducted at Net Bios Computer
Academy whereas the product training is to be conducted at NIS SPARTA. The NIS
SPARTA Institute has more than 150 batches and is trained over 3000 agents for most of
the private insurance companies. This institute is approved by IDRA to train
agents/advisors.
CAREER DEVELOPMENT
They are also providing career development plans, which will identify potential and
create avenues for growth.
SERVICES
They are offering following certain services to their employees.
They are providing knowledge sharing and certification practices.
They are planned team building and fun events.
They are creating Reliance Life Insurance family, which includes employees,
associates and their families.
Reliance Life Insurance in a team building mode and is looking for performance
driven, achievement oriented and challenge loving performance
DIVYA GUPTA 36
PERFORMANCE APPRAISAL
Performance appraisal is the systematic evaluation of the individual with respect
to his/her performance on the job and his/her potential for development.
Performance appraisal is a formal, structured system of measuring and evaluating
an employee’s job related behaviors and outcomes to discover how and why the
employee is presently performing on the job and how the employee can perform
more effectively in the future so that the employee, organization and society all
benefit.
DIVYA GUPTA 37
3.2 MARKETING
DISTRIBUTION CHANNEL
Reliance Life Insurance Company Limited is using five types of distribution channel,
which are as follows:
1) Agency: -
Independent insurance agents represent a number of companies and can research
these companies’ products to find the right combination for their clients. Independent
agents & insurance producer groups are growing in prevalence. Although producer
groups are in their infancy, their emergence may potentially be realignment in the
distribution of financial services. Independent shops realized that by pooling
production and funding a central support office, they had increased buying power.
The one type of distribution channel, which Reliance Life Insurance Co. Ltd is using,
is an agency. This channel works as follows:
Branch
Managers
Advisors
Customers
DIVYA GUPTA 38
2) Bank Assurance: -
While a lot of bank relationships with insurance companies have been established,
life insurance sales have been slower than one would expect he primary bank
insurance activities have been the distribution of annuities, credit life, and direct
marketing insurance. Banks are failing to incorporate successful sales tactics used to
sell other financial services like investments.
Another type of distribution channel is bank assurance. This channel is tie up with
banks. In this channel the advisors using or targeting the bank customers to make a
business with them i.e., to sell the policy of the company.
3) Corporate:-
To gain a better understanding of the demand amongst independent advisors for trust
services and to gain a better feel for how independent advisors handle trust services, a
research was performed with independent advisors across several broker/dealers and
custodians. The interviews revealed that demand is greatest for living trusts among
independent advisors, followed by demand for corporate trustee services.
Another type of distribution channel is corporate, which are for employee benefits.
This channel is tie up with corporate or small enterprises. Through these small
enterprises, the advisors will sell the products/policy to customers of the small
enterprises.
DIVYA GUPTA 39
Rural Benefits:-
Brokerage firms have gained much of the institutional and personal trust business lost
by the banks. These firms have steadily captured assets, primarily at the expense of
the banks. The number of non-bank trust companies has increased in recent years as
independent trust companies have emerged and more broker/dealers are integrated
services. Insurance companies view full-service brokers as a potentially new
distribution channel as well.
Another type of distribution channel is rural benefits. This channel works as a
dealership. In this channel, the dealers will sell the policy to the target customers.
5) Web World:-
Direct sales of life insurance are growing rapidly, but many of the traditional full-
serve players seem to be letting it go. Across all financial services, consumers are
expressing a willingness to deal with a variety of providers on the web. Web sites are
starting to pop up offering consumer insurance products especially designed for
distribution over the web.
Another type of distribution channel is web world. This channel is tie up with
customer database. In this channel, the advisors will sell the policy to the target
customers, which are taken from the customer database, are listed in the website.
PROMOTIONAL PROGRAMMES & TARGET SEGMENT
Promotional programs and target segment are related to each other. The promotional
programs are made to motivate the advisors/agents and sales managers to do more
business i.e., to sell the more policies. The Reliance Life Insurance Co. Ltd has made
three promotional schemes, which are as follows:
DIVYA GUPTA 40
1) Shubh – Arambh:-
This promotional scheme is detailed as follows:
SLAB (WRP) REWARD
ACHIEVERS
30,000 Reliance Life T-Shirt
50,000 Table Top Clock
75,000 Leather Bag
1,00,000 World Space Radio
1,50,000 L.G. Microwave- 19L
2,00,000 DVD/VCD/MP3 Player
3,00,000 Sony Music System
SUPER ACHIEVERS
5,00,000 LG Refrigerators GL-233
7,50,000 LG Air Conditioner 1T
10,00,000 Sony Digital Camcorder
15,00,000 Trip to Dubai 3D/4N
20,00,000 Hero Honda Splender
STAR ACHIEVERS
50,00,000 Maruti Alto Std.
75,00,000 Maruti Swift Lxi
1,00,00,000 GM Aveo 1.4LS
DIVYA GUPTA 41
2) R.A.R.E.:-
The full form of R.A.R.E. is Reliance Advisor’s Reward Experience. This programs
consists of:
New Advisor Incentive Program
Board of Advisors
Annual Discovery Series
Advisor Career Progression
RARE Club – Loyalty Program
The above programs are described as follows
1. R.A.R.E. Program New Advisor Incentives :-
Criteria
There will be two levels in the New Advisor Incentive program
Launch Pad
Take Off
2. R.A.R.E. Program Board of Advisors:-
Criteria
There will be two levels in the Board of Advisors program
A. Time Period
B. Parameters
3. R.A.R.E. Program Discovery Series:-
Criteria
There will be six levels in the Discovery Series program
DIVYA GUPTA 42
i. Qualification period
ii. Business criteria
iii. The qualification criteria will be the same for both the Global
and the National Discovery Series
iv. Qualification for the Global Discovery Series
v. Qualification for the National Discovery Series
vi. The top 150 will be calculated based on WRP (Weighted Recd
Premium)
4. R.A.R.E. Privilege Club:-
Levels
A. The RARE Club will have 6 different levels
B. The criteria for entry into each level will be based on I.
Business (WRP)
II. Persistency
III. Product Mix
C. The qualification period is
I. Logins from 1st Apr ’06 to 31st Mar ‘07 II.
Issuances from 1st Apr ’06 to 15th Apr ‘07
DIVYA GUPTA 43
Qualification Criteria
Level WRP (Rs) Traditional Persistency
Products
Topaz 1,50,000 60% 80%
Pearl 5,00,000 60% 80%
Sapphire 10,00,000 60% 80%
Emerald 15,00,000 50% 85%
Ruby 25,00,000 50% 85%
Diamond 50,00,000 50% 85%
3) Elite Club Scheme:-
In this scheme the advisor, who have login the regular premium of Rs. 2, 00,000 will
be eligible for the Elite Club Membership.
DIVYA GUPTA 44
3.3 FINANCE DEPARTMENT
FUND PERFORMANCE:-
There are four fund options, which Reliance Life Insurance Company Limited has
offered, which are as follows:
1) Capital Secure Fund:-
This fund is for Reliance Golden Years Plan, and Reliance Market Return Plan.
In line with the objective of protecting the capital against any erosion, 61.4% of the
funds were invested in short-term Government Securities (Gilts) and to meet
liquidity requirement higher about 40% of funds are kept in short term b ank
deposits. The net return credited to policyholders and the asset composition ratios
are given in the boxes below.
Net Returns during last 1 month (Mar.’06) 0.36%
Net Returns during the last 3 months (Jan.-Mar.’06) 1.10%
Net Returns during the last 12 months (Apr.’05-Mar.’06) 4.09%
Net Returns since Inception in Feb’03 (Annualized) 3.89%
Bank Fixed Deposits
DIVYA GUPTA 45
Asset Name % of total assets
Total Bank Deposi t 38.60
Gilts
6.75% GOI 2006 6.75
11.68% GOI 2006 13.69
11.75% GOI 2006 40.96
Total Gilts 61.40
Total 100.00
2) Balanced Fund:-
This fund is for Reliance Golden Years Plan, and Reliance Market Return Plan.
To take advantage of the bullish trend in the equity market, the equity holdings in
the fund was maintained as close as possible to the maximum of 20% allowed for the
fund. Bank deposits were maintained only for the purpose of liquidity management.
To reflect their bearish view on the debt market the duration of the fixed income
portfolio was kept low. Within the fixed income portfolio, allocation to Gilts was
higher than corporate bonds. All the bonds in the portfolio are top rated. The asset
composition, the details of the portfolio and the net returns are disclosed below.
DIVYA GUPTA 46
Asset Name % of Total Asset
Equity 20
Corporate Bonds & Debentures 22
Gilts 53
Bank Deposits 5
Total 100.00
3) Growth Fund
This fund is for Reliance Golden Years Plan, and Reliance Market Return Plan.
To take advantage of the bullish trend in the equity market, the equity holdings in
the fund was maintained as close as possible to the maximum of 20% allowed for the
fund. To reflect their bearish view on the debt market the duration of the fixed
income portfolio was kept low. All the bonds in the portfolio are top rated. The asset
composition, the details of the portfolio and the net returns are disclosed below.
Net Returns during last 1 month (Mar.’06) 4.60%
Net Returns during the last 3 months (Jan.-M ar.’06) 7.99%
Net Returns during the last 12 months (Apr.’05-Mar.’06) 24.90%
DIVYA GUPTA 47
Net Returns since Inception in Feb’03 (Annualized) 21.04%
Asset Name % of Total Asset
Equity 9
Corporate Bonds & Debentures 40
Gilts 45
Bank Deposits 6
Total 100.00
4) Equity Fund:-
This fund is for Reliance Market Return Plan. In line with the stated
asset allocation pattern and their view of the market, the entire corpus of
the fund was invested in equities. Net returns earned since inception and
the full portfolio are disclosed below.
Net Returns during last 1 month (Mar.’06) 11.18%
Net Returns during the last 3 months (Jan.-
Mar.’06) 20.02%
Net Returns during the last 12 months
(Apr.’05-Mar.’06) 64.46%
DIVYA GUPTA 48
Asset Name % of Total Asset
Equity 98.93
Mutual Fund/Bank Deposits 1.07
Total 100.00
Net Returns since Inception in Feb’03
(Annualized) 57.83%
DIVYA GUPTA 49
CHAPTER 4
Organizational Hierarchy & Structure
Indian Insurance market was opened to private & foreign investment in 1999-2000
The Indian Insurance industry consists of a total of 31 players
Life: 1 Public sector player; 15 private players
Non-Life: 6 public sector players; 9 private players
Major international players like AIG, Aviva, MetLife, New York Life,
Prudential, Allianz, Sun Life, Standard Life and Lombard are already present with
minority stakes in joint ventures with Indian companies for both Life and Non-life
segments
Life Insurance market is still dominated by Life Insurance Corporation (LIC) - a
public sector company which has 75% share of first year premium in 2006-07
In Non-life, private sector companies (almost all are joint ventures with foreign
insurers) accounted for 34% of the market in 2006 to 07.
DIVYA GUPTA 50
4.1 Hierarchies
CEO
CMO
CHANNEL HEAD
REGIONAL HEAD
BRANCH HEAD
SALES MANAGER
ADVISOR/ AGENTS
CUSTOMERS
DIVYA GUPTA 51
CHAPTER 5
PRODUCTS OFFERED BY RELIANCE LIFE
Reliance has number of insurance products in it’s Portfolio. It offers different products
for different customer profile. It targets its product according to the needs of people
which make them its customer.
Protection Plans
In today’s uncertain world, there could be calamity at every step of the life. It is up to you
to ensure that your family stays protected always.
Reliance Protection Plans helps you do exactly the same. You have a wide range of
options to choose a plan from. Right from limited period plans to lifetime protection
plans, you can opt for the one that suits your lifestyle.
While we understand that nothing can compensate for the loss of a life, we intend to
provide you the peace of mind. Investing in Reliance Protection Plans would mean your
family’s future is in safe hands.
1.Reliance Term Plan
Invest in the Reliance Term Plan, a pure life insurance plan that offers you
comprehensive and affordable coverage for a limited period of time to suit your needs.
DIVYA GUPTA 52
2. Reliance Simple Term Plan
Make a smart investment move by investing in the cost-effective Reliance Simple Term
Plan, which offers you comprehensive coverage for a specified period of time to suit your
need.
3. Reliance Special Term Plan
Imagine a life insurance policy, which on maturity returns to you all the premiums you
had paid for your basic policy. The Reliance Special Term Plan offers that and much
more.
4. Reliance Credit Guardian Plan
The Reliance Credit Guardian Plan secures your family from any loan liabilities you have
incurred in case of your untimely demise. On survival at maturity, you will be returned
all the premiums paid for the basic policy.
5. Reliance Special Credit Guardian Plan
Invest in the Reliance Special Credit Guardian Plan and protect your family from any
loan liabilities you have incurred. On survival at maturity, all premiums paid for the basic
policy will be returned to you.
6. Reliance Endowment Plan
The Reliance Endowment Plan gives you financial independence by allowing you to
decide the amount of Sum Assured based on your current financial position and expected
future expenses… Dream!!..
DIVYA GUPTA 53
7. Reliance Special Endowment Plan
Imagine an endowment plan that protects you for a certain period even after you have
received your lump sum—that is exactly what the Reliance Special Endowment Plan
offers you with other added benefits.
8. Reliance Connect 2 Life
The Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keep
pace with your changing lifestyle. As your income grows, your family will have
sufficient cover.
9.Reliance Whole Life Plan
Give your family a lifetime of timely financial support by investing in the Reliance
Whole Life Plan. This will help you enjoy your life to the fullest.
10. Reliance Wealth + Health Plan
Invest in the Reliance Wealth Health Plan and balance your health needs and wealth
needs, without compromising on either health or wealth
11. Reliance Cash Flow Plan
Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance plan
and easy liquidity through lump sum cash, which means you can get a percentage of the
Sum Assured at periodic intervals.
Savings & Investment Plans
DIVYA GUPTA 54
In life, you have always given your family whatever they have wanted. Yet, there are
some promises you have to fulfill, such as taking your family for a vacation, or buying
that dream house.
Set aside some money to achieve these specific goals with the help of Reliance Savings
& Investment Plans. The plan allows you to experience the joys of life and provide for
your family’s needs.
Enjoy life without worrying about the promises you have made—we are here to fulfill
them.
1. Reliance Super Invest Assure Plan
Reliance Super Invest Assure is a complete plan which addresses your vital needs like
Flexibility, Security, Investment Return and Financial Planning. With all its key benefits,
it is here to ensure that there will always be more than you can ask for!
2. Total Investment Plan I - Insurance
Reliance TIPS -Series I- Insurance is a Unit Linked Investment + Insurance Plan that
helps you meet all your financial needs, without the complexity of managing multiple
products.
3. Reliance Wealth + Health Plan
Invest in the Reliance Wealth Health Plan and balance your health needs and wealth
needs, without compromising on either health or wealth.
4. Reliance Automatic Investment Plan
The Reliance Automatic Investment Plan is an enhanced unit linked plan that allows you
DIVYA GUPTA 55
to choose the right investment mix to reap maximum benefits. It also provides you with
enhanced Life Cover.
5. Reliance Money Guarantee Plan
To reap the benefits of a rising market and to protect yourself from any market decline,
invest in the unit linked Reliance Money Guarantee plan that gives you the perfect
balance between Protection and Savings.
6. Reliance Cash Flow Plan
Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance plan
and easy liquidity through lump sum cash, which means you can get a percentage of the
Sum Assured at periodic intervals.
7. Reliance Market Return Plan
The Reliance Market Return Plan gives you insurance protection and allows you to
benefit from investment growth. It works through your life and meets the changing
requirements you may have from time to time.
8. Reliance Endowment Plan
The Reliance Endowment Plan gives you financial independence by allowing you to
decide the amount of Sum Assured based on your current financial position and expected
future expenses.
9. Reliance Special Endowment Plan
Imagine an endowment plan that protects you for a certain period even after you have
DIVYA GUPTA 56
received your lump sum—that is exactly what the Reliance Special Endowment Plan
offers you with other added benefits.
10. Reliance Whole Life Plan
Give your family a lifetime of timely financial support by investing in the Reliance
Whole Life Plan. This will help you enjoy your life to the fullest.
11. Reliance Golden Years Plan
The Reliance Golden Years Plan helps you save systematically and generate the much-
needed corpus to help you enjoy life after retirement.
12. Reliance Golden Years Plan Value
Realize all your dreams of playing golf, or going for a world tour after retirement by
investing in the Reliance Golden Years Plan Value, which helps you generate the amount
you will need for the future.
13. Reliance Golden Years Plan Plus
Invest in the special Reliance Golden Years Plan Plus that not only helps you build the
corpus you need after, but also collects a basic minimum amount in case something were
to happen before you realize your dreams.
14. Reliance Connect 2 Life Plan
The Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keep
pace with your changing lifestyle. As your income grows, your family will have
sufficient cover.
DIVYA GUPTA 57
Retirement Plans
You are a young and earning individual. The income you earn allows you to enjoy life,
your only worry being whether you will be able to continue the same lifestyle after
retirement.
A Reliance Retirement Plan will help you save money for your retirement. It ensures that
you continue to get some income after retirement thereby ensuring that you do not have
to depend on any other person or make any compromises to maintain the same lifestyle.
Invest in a Reliance Retirement Plan today and enjoy life after retirement on your own
terms.
1. Total Investment Plan II - Pension
When you invest in the Reliance Total Investment Plan, you give yourself the assurance
that you will make each one of your dreams come true!.
2. Reliance Golden Years Plan
The Reliance Golden Years Plan helps you save systematically and generate the much-
needed corpus to help you enjoy life after retirement.
3. Reliance Money Guarantee Plan
To reap the benefits of a rising market and to protect yourself from any market decline,
invest in the unit linked Reliance Money Guarantee plan that gives you the perfect
balance between Protection and Savings...
DIVYA GUPTA 58
Child Plans
Being a parent is one of the joys of life. Your child looks up to you and depends on you
for love, protection and support. You want to provide your child with the best in life.
The Reliance Child Plan helps you save systematically so that you can secure your
child’s future needs. Be it higher education, his or her first home or any other
requirement, you will always be there for your child when he or she needs you.
So, invest in a Reliance Child Plan right away—it is the best gift you could ever give
your child.
1. Reliance Super Invest Assure Plan
Reliance Super Invest Assure is a complete plan which addresses your vital needs like
Flexibility, Security, Investment Return and Financial Planning. With all its key benefits,
it is here to ensure that there will always be more than you can ask for!
2. Reliance Child Plan
Save systematically and secure the financial future of your child by investing in the
Reliance Child Plan and let your child enjoy today without worrying about tomorrow.
3. Reliance Secure Child Plan
Reliance Life Insurance presents a unit linked insurance plan that secures your child’s
financial future, leaving you free from worry.
4.Reliance Wealth + Health Plan
Invest in the Reliance Wealth Health Plan and balance your health needs and wealth
needs, without compromising on either health or wealth.
DIVYA GUPTA 59
SOME LUCRATIVES PLANS WHICH RELIANCE OFFERS
RELIANCE ENDOWMENT PLAN
It takes a lot for a dream to become a reality. And money is surely an important part of it.
Reliance Endowment Plan gives you just the financial independence to realize your
dreams in the future. It lets you decide how much you would like to set as your Sum
Assured based on your current financial position and your expected future expenses.
So, go ahead... dream!!.
Key Features
1 .On maturity receive Sum Assured plus bonuses
2. Wealth creation through bonus additions
3. More Value for your money by way of High Sum Assured Rebate
4. Choose to add the Benefit of three Riders-Reliance Term Life Insurance Benefit Rider,
5. Reliance Critical Conditions Rider and Reliance Accidental Death and Total and
permanent Disablement Rider
7. Choose to avail of Policy Loan after three years
CASH FLOW PLAN
While most insurance plans block your money for a certain period of time, Reliance Cash
Flow Plan gives you the double benefit of life insurance along with easy liquidity through
lump sum cash. It provides money periodically when you need it.
DIVYA GUPTA 60
It lets you live life to the fullest today and at the same time, helps you stay protected for
tomorrow by giving you the flexibility of receiving a specified percentage of the Sum
Assured at specified intervals
Key Features
Easy Liquidity - Get periodic cash flows at the end of the fourth year and
thereafter at the end of every three years
Wealth creation through bonus additions
On maturity, accumulated bonuses along lump sum payout receive with final
More value for your money by way of High Sum Assured Rebate
Full Sum Assured plus bonuses in case of your unfortunate death, this is over and
above the Survival Benefits already paid
Option to add two Riders - Critical Illness Rider & Accidental Death Benefit and
Total and Permanent Disablement Rider
RELIANCE HEALTH + WEALTH PLAN
Under this plan the investment risk in the investment portfolio is borne by the
policyholder.
There are times when late working hours take precedence over your health check-ups.
And there are times when a visit to the doctor seems more important than dividends on
your shares. In the rat race to make money, we often forget to take care of ourselves.
We understand this predicament. Here is a plan that will ensure that your wealth keeps
increasing constantly and yet your health does not take a backseat. The Reliance Wealth
Health Plan. A plan that gives you the benefits of wealth bhi health bhi
Life changes. And as it does, so do your priorities. After all, the circumstances of your
life can determine the type of health coverage you need.
DIVYA GUPTA 61
India has made rapid strides in the health sector. Since Independence, life expectancy has
gone up markedly and survival rates have also increased, still critical health issues
remain. Infectious diseases continue to claim a large number of lives.
Perhaps you're a freshly minted graduate, a joyful newlywed, retiring early or between
jobs. Maybe you're running your own business or raising a family — or both. In any of
the situations, GOOD or BAD, health cannot be taken for granted. All are affected b y the
rising costs of medical expenses. That’s why it is important to plan early and in advance.
Reliance Wealth + Health Plan, a health insurance plan underwritten by Reliance Life
Insurance Company Limited, is designed to work in conjunction with contrib utions
towards savings. The uniqueness of this plan is that it not only provides benefits for
covered injuries but also for other injuries by encashment from the unit fund. This plan
from Reliance Life offers the Hospitalization and Surgical Benefits and a lso covers
Critical Illnesses. In short this plan provides you with a personalized quality health cover
that fits your lifestyle.
Key Feature
A Unit Linked plan with Unique Savings Component
Twin benefit of market linked return and health protection
Choose from two different plan options
Flexibility to take care of your family’s health
Flexibility to switch between funds / plan options
Option to pay Top-ups
Option to package with multiple riders
Liquidity through partial withdrawals
DIVYA GUPTA 62
RELIANCE SUPERINVESTASSURE PLAN
Under this plan the investment risk in the investment portfolio is borne by the
policyholder.
You have always aspired for the best in life. And we help you achieve that.
Here’s a unique plan which combines protection and savings. It also offers complete
flexibility to gain control over your investments vis-à-vis your financial needs and risk
appetite.
We value your regular investments and thus reward you with guaranteed additions thus
promising unmatched benefits. This plan also offers you a unique option of moving from
a conservative fund to an aggressive fund systematically, to take advantage of the Rupee
cost averaging model.
A plan that promises you, what you ought to deserve as you reach greater heights in life.
What more can you ask for except gifting yourself with Reliance Super Invest Assure
Plan
Key features – Reliance Super Invest Assure Plan
Twin benefit of market linked return and insurance protection.
Guaranteed additions at the rate of 50% of your first year’s basic premium at
interval of every 5 years from 10th year till policy is in force
Investment opportunity with flexibility -Choose from 8 pure investment fund
options.
Option to pay Top-up premium(s)
Liquidity in the form of partial withdrawals
A host of optional rider benefits to enhance protection cover.
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RELAINCE AUTOMATIC INVESTMENT PLAN
Under this plan the investment risk in the investment portfolio is borne by the
policyholder.
Life is indeed delightful if you have the freedom to make choices. The Reliance
Automatic Investment Plan gives you just that ample freedom! And we make this
freedom more enjoyable by giving you a sense of security. Whether it’s your insurance or
investments, we let you make the choice and leave the rest to us.
So allow us to take over and you can be rest assured, because for us your LIFE comes
FIRST… always.
This plan promise enhanced Life Cover, with complete flexibility to gain control over
your investments in tune with your financial needs and your risk appetite. A plan that
promises you what you deserve as you reach greater heights in life.
For a select few like you, the Reliance Automatic Investment Plan is an enhanced Unit
Linked plan addressing comprehensive needs to strike that perfect balance of protection
and Savings with full flexibility as you grow in your career. The Reliance Automatic
Investment Plan gives you full flexibility to choose just the right investment mix to reap
higher benefits.
Key Features
Two plan option to choose from Ready-made and Tailor-made
Life Stage asset allocation to ensure automatic change in investment patterns,
under the Ready-made Plan option
Freedom to decide your own fund mix based on your risk profile under the Tailor-
made Plan
Allows Systematic Transfer Plan to average out the cost of unit purchased in
equality
Regular, limited, single premium paying options
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Unmatched flexibility throughout ‘Exchange Option ‘
Liquidity in the form of partial withdrawal
Option to avail of Accidental Death and Total & Permanent Disability and Term
Insurance riders.
RELAINCE TOTAL INVESTMENT PLAN SERIES -1
The journey of life, even though it may seem simple, comes with its own twists and turns,
some good, some unfortunate. And along with these moments come new dreams. With
every little twist, our dreams change and so do our ambitions. And most of all we desire a
security that will help us follow our dreams, both financial and emotional. It is this
security that Reliance Life Insurance Company Limited promises to bring to you with its
Total Investment Plan Series I Insurance.
To know more, read further…
We value your dreams in this journey of life. Reliance Total Investment Plan Series I -
Insurance (TIPS-I -Insurance) helps you bring them to reality. Your need for investment,
protection and financial liquidity keeps changing at different stages of life. The birth of a
child will require you to increase your insurance cover; a marriage in the family will
require additional money. We provide you that kind of flexibility which suits you best at
your convenience. Similarly on a promotion you may want to increase your investments
to create a large kitty for future expenses. As you progress on this ladder of life we
provide you the platform to increase your investment. Usually you would require
multiple financial products to meet all your needs and would have to actively manage
them. However with the Reliance TIPS-I -Insurance, Unit Linked Investment + Insurance
Plan you can meet all your financial needs, without the complexity of managing multiple
products
Key Features
This is a Single Premium unit linked savings life insurance plan with options to purchase
the same plan with reduced allocation charges in subsequent policy years. Since more
DIVYA GUPTA 65
Premium is allocated towards investment due to lower allocation charges on subsequent
purchases, greater would be the returns. Purchasing the same plan in the subsequent years
is an option.
1st purchase would be called as “Classic”
2nd purchase would be called as “Silver”
3rd purchase would be called as “Gold”
4th purchase would be called as “Diamond”
5th purchase would be called as “Platinum”
Once you purchase the first policy there will full flexibility, as to when second and
subsequent purchase can be made and how much Premium should be paid for each
purchase subject to the following:
The minimum Premium on each purchase should be at least Rs. 25000 for life assured
aged up to 40 and Rs. 50000 for life assured aged 41 to 64.
The maturity date on each purchase cannot exceed 70 years.
All the polices should mature on maturity date of the first purchase.
The term of the polices purchased during second, third, fourth and fifth policy years will
be 9, 8, 7 and 6 respectively.
New policy can be purchased only if all the previous polices are in force on the date of
purchase of new policy.
Objective:
The pace setter plan with protection to life which gives
Tax benefit under Sec. 80C and Sec. 10(10D)* of Income Tax Act 1961
Investment opportunity with flexibility
Life protection
Control over your investments
DIVYA GUPTA 66
CHAPTER 6
Achievements/ Recognition
RLIC has been one of the fast gainers in market share in new business premium
amongst the private players with an incremental market share of 4.1% in the
Financial Year 2007-08 – from 3.9% in April 07 to 8% in Feb 08. ( Source: IRDA)
Also continues to be amongst the fast growing Private Life Insurance
Companies with a YOY growth of 195% in new business premium as ofMar’08.
A Company that has crossed 1.7 Million policies in just 2 years of operation, post
takes over of AMP Sanmar business.
Initiated Express Life – an Unique ’Over the Counter’ sales process for Unit
Linked Insurance Policies in the Industry.
Accomplished a large distribution ramp-up in the Industry in a short span of time by
opening 600 branches in 10 months taking the overall branch network above 740.
RLIC continues to be one of the two Life Insurance companies in India to be
certified ISO 9001:2000 for all the processes.
Awarded the Jamnalal Bajaj UchitVyavaharPuraskar 2007- Certificate of Merit
in the Financial Services category by Council for Fair Business Practices (CFBP).
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CHAPTER 7
Comparative performance of the organization
Presently there are 15 Life insurance companies in the country. There is only one public
sector company LIC and the rest 14 are private sector. Although LIC has been
dominating the Life Insurance business since past few years the private players have now
started to take the momentum
Major Market Players: -
Birla Sun Life Insurance Company: -
Birla Sun Life Insurance Company is a 74:26 joint venture between Birla group and Sun
Life Financial. It is a private sector company. The company was registered on 31/1/2001.
The market share for FY 2005-06 was 1.89%.
HDFC – Standard: -
HDFC standard is a 74:26 joint venture between HDFC and Standard Life. It is a private
sector company. The company was registered on 23/10/2000. The market share for FY
2005-06 was 2.87%.
ICICI Prudential Life Insurance: -
ICICI Prudential Life is a 74:26 joint venture between ICICI and Prudential. It is a
private sector company. The company was registered on 24/11/2000. The market share
for FY 2005-06 was 7.35%.
Life Insurance Corporation of India (LIC): -
Life Insurance Corporation of India is a 100% government held Public Sector Company.
Being the first to be established LIC is the forerunner in the Life Insurance sector. The
market share for FY 2005-06 was 71.44%.
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Kotak Mahindra OLD Mutual:
Kotak Mahindra OLD Mutual is a 74:26 joint venture between Kotak Mahindra bank and
Old Mutual. It is a private sector company. The company was registered on 10/1/2001.
The market share for FY 2005-06 was 1.11%.
Max New York Life: -
Max New York Life is a 74:26 joint venture between J & Bank, Pallonji& Co and
MetLife. It is a private sector company. The company was registered on 6/8/2001. The
market share for FY 2005-06 was 1.23%.
Aviva Life Insurance India: -
Aviva Life insurance is a 74:26 joint venture between Aviva and Dabur. It is a private
sector company. The company was registered on 14/5/2002. The market share for FY
2005-06 was 1.14%.
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 private sector company. The company
was registered on 2/8/2001. The market share for FY 2005-06 is 0.79%.
Met Life India:
Met Life India is a 74:26 joint venture between 74:26 JV between J & Bank, Pallonji&
Co and MetLife. It is a private sector company. The company was registered on 6/8/2001.
The market share for FY 2005-06 was 0.40%.
Bajaj Allianz Life Insurance Co.: -
Bajaj Allianz Life Insurance Company is a 74: 26 Joint venture between Bajaj Auto
DIVYA GUPTA 69
limited and Allianz AIG. The company was registered on 3/8/2001. The market share for
FY 2005-06 was 7.56%.
SBI Life Insurance Company Ltd: -
SBI Life Insurance Company is a 74: 26 Joint venture between SBI and Cardiff S.A. The
company was registered on 31/3/2001.It is a private sector company. The market share
for FY 2005-06 was 2.31%
The TATA AIG Group: -
TATA AIG group is a 74:26 JV between Tata Group and AIG. It belongs to the private
sector. The company was registered on 12/2/2001. The market share for FY 2005-06 was
1.29%.
Sahara India Life Insurance Company Ltd.:
The Company commenced operations from 30th October 2004. The market share for FY
2005-06 was 0.06 %.
Shriram life insurance company Ltd: -
Shriram Life is a recent entrant into the life insurance sector It is a 74:26 joint venture
between the Shriram group through its Shriram Financial Holdings and Sanlam Life
Insurance Limited, South Africa. The company expects to start operations soon.
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1) Capital Fund: -
Capital Fund of Private Companies
( Rs in Crore )
ICICI Prudential 375
Max New York 250
HDFC Standard 218
Bajaj Allianz 200
Tata AIG 183
Birla Sun Life 180
AVIVA 155
OM Kotak 153
Reliance Life 126
SBI Life 125
Met Life 110
ING Vysya 110
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Chapter 8
SWOT ANANLYSIS
SWOT analysis is the analysis of the internal and external factors, which have
impact on the survival of any organization. Now let’s make SWOT analysis for
reliance Life Insurance Company Limited.
STRENGTHS:
1) Reliance Life Insurance Company Limited is the part of the Reliance
Capital.
2) The brand name is enough to sell the products easily.
3) Private placement of Rs. 10,000 crs. worth of securities with RBI by
the government. Led to an improvement in market securities.
4) Strong liquidity from FII was the major reason for the up move.
5) Range of products
6) Reliance has a long and strong history of solvency, financial stability
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WEAKNESSES:
1) Newly established company, so people seems it risky.
2) Lack of staff.
3) Lack of advertisement, so most of the customers are not aware of
the Reliance Life Insurance.
OPPORTUNITY:
1) There is a vast untapped market in India. The life insurance
penetration in India is approximately 2.5%. So it has large potential.
2) Intention of traditional products is to encourage long term, regular
and disciplined savings to systematically build up a target fund.
3) The average insurance premium being collected by the company has
been growing exponentially year on year.
THREATS:
1) The main threat is from the other players who have grabbed
approximately 15% of the market share.
2) As the government has scrapped the rebate on the life insurance
premium, the people who used to invest in life insurance for the sole
motive of tax benefit may turn to other instruments
DIVYA GUPTA 73
PART- 2
DIVYA GUPTA 74
CHAPTER -1
INTRODUCTION OF THE TOPIC
Insurance is actually a contract between 2 parties whereby one party called insurer undertakes
in exchange for a fixed sum called premium to pay the other party happening of a certain
event.
Insurance is a contract whereby, in return for the payment of premium by the insured, the
insurers pay the financial losses suffered by the insured as a result of the occurrence of
unforeseen events.
With the help of Insurance, large number of people exposed to a similar risk make
contributions to a common fund out of which the losses suffered by the unfortunate few, due
to accidental events, are made good.
Need of Insurance
India is a country where the average selling of Life insurance policies is still lower than many
Western and Asian countries, with the second largest population in world the Indian insurance
market is looking very prospective to many multinational and Indian insurance companies
for expanding their business and market share. Before the opening of Indian market for
Multinational Insurance Companies, Life Insurance Corporation (LIC) was the only company
which dealt in Life Insurance and after opening of this sector to other private companies, all
the world leaders of life insurance have started their operation in India.
Customer satisfaction is a marketing term that measures how products or services supplied by
a company meet or surpass a customer’s expectation.
DIVYA GUPTA 75
The three Cs of customer satisfaction: Consistency, consistency, consistency
“Sustaining an audience is hard,” Bruce Springsteen once said. “It demands a consistency
of thought, of purpose, and of action over a long period of time.” He was talking about his
route to music stardom, yet his words are just as applicable to the world of customer
experience. Consistency may be one of the least inspirational topics for most managers. But
it’s exceptionally powerful, especially at a time when retail channels are proliferating and
consumer choice and empowerment are increasing.
Customer-journey consistency
It’s well understood that companies must continually work to provide customers with superior
service, with each area of the business having clear policies, rules, and supporting
mechanisms to ensure consistency during each interaction. However, few companies can
deliver consistently across customer journeys, even in meeting basic needs.
The fact is that consistency on the most common customer journeys is an important predictor
of overall customer experience and loyalty. Banks, for example, saw an exceptionally strong
correlation between consistency on key customer journeys and overall performance in
customer experiencedeliver consistently across customer journeys, even in meeting basic
needs.
Emotional consistency
What is also striking is how valuable the consistency-driven emotional connection is for
customer loyalty. For bank customers, “a brand I feel close to” and “a brand that I can trust”
were the top drivers for bank differentiation on customer experience. In a world where
research suggests that fewer than 30 percent of customers trust most major financial brands,
ensuring consistency on customer journeys to build trust is important for long-term growth.
DIVYA GUPTA 76
Communication consistency
A company’s brand is driven by more than the combination of promises made and promises
kept. What’s also critical is ensuring customers recognize the delivery of those promises,
which requires proactively shaping communications and key messages that consistently
highlight delivery as well as theme
NEED OF CUSTOMER SATISFACTION IN INSURANCE
The Insurance companies basically have similar products, similar services, and similar
technology. In fact, everything the company does was tied to its core values which inurn tied
with its employee’s performance. Employees agree with this continuous improvement
Process. They conclude as people never like to buy insurance, so service provider must make
it as easy and pleasant as possible and that was one focus of continuous improvement
in service provided for the benefit of the customer. Gregory A. Kuhlemeyer (1999)
conducted a research on consumer satisfaction relevant to the purchase of life insurance
products and compares satisfaction in a agent assisted transaction with satisfaction
when no agent is used. Benchmarks, identified for consumer satisfaction, are the life
insurance product, the agent, and the institution. The hypothesis of the study was that,
consumer satisfaction with the life insurance purchase is primarily a func tion the trust of a
policy holder on his agent or on the insurance company, agent's competence, the
product selected by the consumer, the financial safety, and fulfillment of consumer goals.
The agent assisted versus direct placement of individual life insurance was compared
and found that consumers are highly satisfied with their agents, when they believed that
their agent is trustworthy, knowledgeable, selling only the appropriate products . On the other
hand, academic background, professional designations, a long business history, age, gender,
or marital status of the agents do not influence consumer satisfaction. In the same way,
consumers are highly satisfied with their firm, only when they perceive that their life
DIVYA GUPTA 77
insurance firm provides a portfolio of products that will meet their financial needs, employing
competent representatives, and creates a trusting relationship. Purchasers who use the agent
alone are more satisfied with their insurance company than purchasers who use both an
agent and the direct purchase approach. In the same way, the direct sales method scored
the highest level of satisfaction because purchasers trust their life insurance company very
highly. They also found that, single premium policies secured the lowest level of consumer
satisfaction and term insurance, universal life, and whole life insurance give the higher
level of consumer satisfaction, in that order.
Customer satisfaction is important because it provides marketers and business owners with
a metric that they can use to manage and improve their businesses.
In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a
customer satisfaction metric very useful in managing and monitoring their businesses.
Here are the top six reasons why customer satisfaction is so important:
It’s a leading indicator of consumer repurchase intentions and loyalty
It’s a point of differentiation
It reduces customer churn
It increases customer lifetime value
It reduces negative word of mouth
It’s cheaper to retain customers than acquire new ones
1. It’s a leading indicator of consumer repurchase intentions and loyalty
Customer satisfaction is the best indicator of how likely a customer will make a purchase in
the future. Asking customers to rate their satisfaction on a scale of 1-10 is a good way to see if
they will become repeat customers or even advocates.
Any customers that give you a rating of 7 and above, can be considered satisfied, and you can
safely expect them to come back and make repeat purchases. Customers who give you a rating
DIVYA GUPTA 78
of 9 or 10 are your potential customer advocates who you can leverage to become evangelists
for your company.
Scores of 6 and below are warning signs that a customer is unhappy and at risk of leaving.
These customers need to be put on a customer watch list and followed up so you can
determine why their satisfaction is low.
That’s why it’s one of the leading metrics businesses use to measure consumer repurchase and
customer loyalty.
2. It’s a point of differentiation
In a competitive marketplace where businesses compete for customers; customer satisfaction
is seen as a key differentiator. Businesses who succeed in these cut-throat environments are
the ones that make customer satisfaction a key element of their business strategy.
Picture two businesses that offer the exact same product. What will make you choose one over
the other?
If you had a recommendation for one business would that sway your opinion? Probably. So
how does that recommendation originally start? More than likely it’s on the back of a good
customer experience. Companies who offer amazing customer experiences create
environments where satisfaction is high and customer advocates are plenty.
This is an example of where customer satisfaction goes full circle. Not only can customer
satisfaction help you keep a finger on the pulse of your existing customers, it can also act as a
point of differentiation for new customers.
3. It reduces customer churn
An Accenture global customer satisfaction report (2008) found that price is not the main
reason for customer churn; it is actually due to the overall poor quality of customer service.
DIVYA GUPTA 79
Customer satisfaction is the metric you can use to reduce customer churn. By measuring and
tracking customer satisfaction you can put new processes in place to increase the overall
quality of your customer service.
4. It increases customer lifetime value
A study by Info Quest found that a ‘totally satisfied customer’ contributes 2.6 times more
revenue than a ‘somewhat satisfied customer’. Furthermore, a ‘totally satisfied customer’
contributes 14 times more revenue than a ‘somewhat dissatisfied customer’.
Successful businesses understand the importance of customer lifetime value (CLV). If you
increase CLV, you increase the returns on your marketing dollar
5. It reduces negative word of mouth
McKinsey found that an unhappy customer tells between 9-15 people about their experience.
In fact, 13% of unhappy customers tell over 20 people about their experience.
That’s a lot of negative word of mouth.
How much will that affect your business and its reputation in your industry?
Customer satisfaction is tightly linked to revenue and repeat purchases. What often gets
forgotten is how customer satisfaction negatively impacts your business. It’s one thing to lose
a customer because they were unhappy. It’s another thing completely to lose 20 customers
because of some bad word of mouth.
To eliminate bad word of mouth you need to measure customer satisfaction on an ongoing
basis. Tracking changes in satisfaction will help you identify if customers are actually happy
with your product or service.
6. It’s cheaper to retain customers than acquire new ones
DIVYA GUPTA 80
This is probably the most publicized customer satisfaction statistic out there. It costs six to
seven times more to acquire new customers than it does to retain existing customers.
If that stat does not strike accord with you then there’s not much else I can do to demonstrate
why customer satisfaction is important.
Customers cost a lot of money to acquire. You and your marketing team spend thousands of
dollars getting the attention of prospects, nurturing them into leads and closing them into
sales.
As at present there is a difficult task to satisfy the customer as in intangible service like in
Insurance, this is the reason that in India only 30% people are insured. In my study I choose
Life Insurance Corporation because it is most leading company in Insurance sector and
customer are more satisfy with the services & products.
To keep this in my mind I select the following topic for my study:
A study on “comparison of customer satisfaction between Reliance Life
Insurance & Life Insurance Corporation”
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CHAPTER 2
Scope and Objective
2.1 OBJECTIVES
The objectives of my study are as follows:
To find out the awareness about Life insurance product. As Insurance is a
intangible product and in India there are more percentage of people are living in rural
and semi- urban areas and they are earning low amount of income due to this reason
they are not having sufficient amount to take Insurance policies. S I my first objective
is to find out the awareness level according to Income level.
To find out the purpose of purchasing the insurance policy. As Insurance has many
different plans so my second objective of my study is to find out that why they are
purchasing the Insurance policy that may be for savings, for opposite circumstances,
for future needs etc, and according to customer demand different types of plans are
also have like Term plan, Endowment plan, Retirement Plan, and Health Pan etc.
To find out the satisfaction level in between policy of Reliance Life Insurance
company & Life Insurance Corporation. As to retain the customer by providing
satisfaction is toughest task for the service sector like Insurance, for this I want to
compare it with LIC which is the most leading Insurance company in India and
customer are more satisfy with this company.
2.2 SCOPE OF THE STUDY
To understand the relations maintained by the Reliance Insurance Company with its
customers. Ever increasing competition, low interest rates, and declining margins have
driven firms to discover the customer as the basic element in their business equation
Insurance as a sector has shown tremendous growth in recent years. People now are
DIVYA GUPTA 82
becoming more secured in terms of their life as well as their money. They want a
profitable benefit out of their investment. There is a need to know the companies’
efforts towards convincing the customer about their product and to know how to create
loyal customers. Insurance happens to be a mega opportunity in India. It’s a business
growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450
billion.
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CHAPTER 3
RESEARCH DESIGN
The research methodology, not only the research methods are but also consider the logic
behind the methods. They are in the contest of our research studied.
And explain why we are using a particular method or techniques and we are using others.
Quantitative /Qualitative analysis
The research methodology is quite based on responses from customer, which was generated
through questionnaire. The project is also based on responses from employees of the
company. Most of data has been quantitatively analyzed.
Sampling
The universe:
Lucknow
The sample size
A sample size of 200 customers was taken for the analysis part. Questionnaire containing 10
questions, which includes the awareness of Insurance policy, most preferred Plan among
customers, comparison on different heads of customer satisfaction between RLIC & LIC.
Tools for data collection
Text books, articles from various websites happen to be sources of various secondary data.
Primary data has been collected through the method of survey.
A questionnaire was given two hundred (200) samples for basically understanding most
preferred Insurance Company among the customer regarding customer satisfaction from
different perspective.
DIVYA GUPTA 84
Field work
I made a questionnaire for the primary data collection to know about the customer
satisfaction. The questionnaires are filled up by two hundred responds. I must say that it was
one of the most challenging but interesting aspect of my project work. It was challenging
because, there was of course language problem, and convincing or detailing retailers about
new schemes and survey objective was real challenge. It was also a learning experience in
other way.
Methods of Data Analysis
Statistical tools used for the analysis part of the project. With help of MS-excel and SPSS data
collected through sample have been analyzed. Pie charts and tables have been used to make
data analysis lucid and direct.
Research Design
Sample Size 200
Types of data Primary & Secondary
Sampling Design Stratified Sampling
Data Analysis Technique Exploratory data analysis and
Descriptive Statistics
DIVYA GUPTA 85
CHAPTER 4
DATA ANALYSIS & INTREPRETATION
Data analysis is a process of gathering, modeling, and transforming data with the goal of
highlighting useful information, suggesting conclusion, and supporting decision making. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a verity
of names, in different business, science, and social sciences domains. Data mining is a
particular data analysis technique that focuses on modelling and knowledge discover for
predictive rather than purely descriptive purpose. Business intelligence covers data analysis
that relies heavily on aggregation, focusing on business information. In statistical applications,
some people divide data analysis into:
➢Descriptive Statistics
➢Exploratory data analysis, and
➢Confirmatory analysis
Techniques used for data analysis:-
➢Pie chart
➢Bar chart
➢Histogram
➢ Line chart
The research based will be Descriptive Research.
Type of data
1. Primary data
2. Secondary data
Primary data
DIVYA GUPTA 86
The primary or the first hand data will be collected with the help of handing out the
questionnaire to the customers &employees.
Secondary data
The major source of secondary or supporting data will be internet.
Using this data measurement technique, information was collected by personal interviews.
Secondary data was collected through company websites, discussions with company guide.
The collected data was processed through S.P.S.S. Package.
Sampling Design
The research was mainly opted on customer’s survey, adviser’s survey.
The sample selected for survey was stratified sample. Sample size is 200 Customers
DIVYA GUPTA 87
4.1 QUESTIONS & INTERPRETATION
1. Do you have any Insurance Policy?
a) Yes b) No
No. of respondents
Yes 65%
No 35%
Interpretation
Out of 200 respondents 130 people has Insurance policies.
70 respondents has no Insurance Plans
It means till now people are not aware about Insurance.
2. If you are not taking any insurance policy then please tell us the reason, why?
65%
35%
INSURANE HOlDERS
Yes No
DIVYA GUPTA 88
a) I could not afford 35%
b) I don’t see any benefit with it 10%
c) I don’t want Insurance 30%
d) I don’t understand that how it works? 25%
Interpretation
Mostly proportion of sample size i.e. 35% are not taking Insurance Plan due financial
problem, they cannot afford it.
Another reason found i.e. 30% that they don’t want Insurance due to
Unawareness among people.
25% respondents don’t know how it works.
3. Age Group:
a) 18-25 25%
0
5
10
15
20
25
30
35
I can not afford I don't see anybenefit with it
I don't wantInsurance
I don't understandthat how it works?
DIVYA GUPTA 89
b) 25-40 40%
c) 40-60 30%
d) Above 60 5%
Interpretation
Above 25 years and below 40 years people are more aware about Insurance.
Between age group of 18 to 25 years only 25% are aware about Insurance.
4. Income level:
a) No income 15%
b) Low Income 20%
c) Medium Income 55%
18-25
25-40
40-60
above 60
Age Groups
18-25 25-40 40-60 above 60
DIVYA GUPTA 90
d) High Income 10%
Interpretation
Out of 200 respondents 55% people are belongs from medium Income level family.
5. What is the p urp o s e fo r b uying ins uranc e P o lic y ?
a ) F o r o ld savings 30%
b ) F amily needs 20%
c ) Time to t ime needs 28%
0% 10% 20% 30% 40% 50% 60%
No income
Low Income
Medium Income
high Income
Income Level
Series 1
DIVYA GUPTA 91
e ) O ppos ite c ircums ta nces 22%
Interpretation
Out of 130 respondents who have Insurance Policy, 30% have buy Insurance because
of old savings, 28% for time to time needs, 22% for opposite circumstances &
remaining 20% buy Insurance for family needs.
6. On whic h c o mp any d o yo u b elieve mo s t?
a) Relia nce Life Insurance 40%
b ) Life Insurance C orpo ra t ion 52%
For old savings30%
Family Needs20%
Time to time needs28%
Opposite Circumstances
22%
Purpose of Buying Insurance Policy
For old savings
Family Needs
Time to time needs
Opposite Circumstances
DIVYA GUPTA 92
c ) Both a & b 08%
Interpretation
People are more preferred LIC compare to Reliance Life Insurance i.e 52% from LIC
& 40% from RLIC and remaining 8% includes both.
7. Do yo u want whic h typ e o f ins uranc e p o lic y?
a. ULIP ( Unit Linked Plan) 18%
b. Traditional plan 25%
0% 10% 20% 30% 40% 50% 60%
Reliance Life Insurance
Life Insurance Corporation
Both
40%
52%
8%
Preferred Company
Preferred Company
DIVYA GUPTA 93
c. Health Plan 30%
d. Term plan 27%
Interpretation
Out of 130 respondents 30 % are having Health plan.
27% are having term plan & 25% choose Traditional plan.
8. Are you satisfied with the return on investment which you getting
from policy?
a) Very satisfied 45%
Unit Linked Plan18%
Traditional Plan25%
Health Plan30%
Term Plan27%
TYPES OF PLANS
DIVYA GUPTA 94
b) Satisfied 35%
c) Can’t say 05%
d) Not much Satisfied 10%
e) Dissatis f ied 05%
Interpretation
45% respondents are very satisfied with the return on investment of
Insurance Policies.
Only 5% respondents are dissatisfied with return on investment.
9. Extent of your satisfaction with the following:
0%
10%
20%
30%
40%
50%
VERY SATISFIED SATISFIED CAN'T SAY NOT MUCH
SATISFIED
DISSATISFIED
Satisfaction level regarding return on investment
Satisfaction level regarding return on investment
DIVYA GUPTA 95
Particular Very
Satisfied
Satisfied Can’t
Say
Not much
Satisfied
Dissatisfied
Easy accessibility of information
on the services
RLIC 32% 20% 10% 25%
13%
LIC 45% 35% 05% 10% 5%
Easy of using e- services
RLIC 30% 40% 3% 15% 12%
LIC 40% 35% 05% 10% 10%
Fairness and equity in treatment RLIC 25% 28% 15% 22% 10%
LIC 45% 28% 05% 17% 05%
Claim settlement procedure
RLIC 15% 35% 10% 25% 15%
LIC 35% 30% 5% 15% 15%
Interpretation
Compare to Reliance Life Insurance, LIC is more able to satisfy their customers
regarding easy accessibility of information about different policies, E- services,
Fairness & equity treatment in treatment & in claim settlement procedure.
CHAPTER 5
FINDINGS, RECOMMENDATIONS & LIMITATIONS
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1. In research it is found that in 200 sample size only 65% people are aware about
Insurance policy & rest 35 % i.e. 70 people are not aware about it, it means they don’t
care about their future uncertainties.
2. The foremost reason of not taking the Insurance policy I found that 35% people
that is among 70, 25 people have not afford it due to high premium amount and
21 don’t want Insurance due to unawareness of different plans & policies.
3. It is found that between the 25-40 years people are more aware about Insurance
policies i.e. 40%.
4. 55% people who are taking Insurance policies are belonging form medium
Income level group, because medium level group wants to save money or to
invest money for future needs & uncertainties.
5. In research it is found that 30% people are taking Insurance policies mainly for
their old savings, 28% for their time to time needs, 22% for the opposite
circumstance & 20% wants for their family needs.
6. In comparison between Reliance Life Insurance (RLIC) & Life Insurance
Corporation (LIC) 52% customers are believing on LIC & only 40% customers
are believing on RLIC and rest 8% taking plans in both the companies.
7. In Insurance plans 30% customers are choosing Health plans, it means at
present people are more careful about their health, 27% are taking Term plans
which includes Education Plan, Child Plan, and Marriage plan etc., 25% are
investing in Traditional plans & 18% are choosing ULIP plans.
8. With the satisfaction on return on investment of the Insurance policies 45% are
very satisfied, 35% are satisfied and only 5% are dissatisfied. It means
companies are giving return on their invested income.
9. In research I found that with comparison of RLIC & LIC People are more
satisfied with LIC regarding Easy accessibility of information to the customers’
i.e 45% & in other hand in RLIC this ration is only 32%, In RLIC customers are
not getting required information.
DIVYA GUPTA 97
10. At present e-services are in fashion because people don’t want to waste their
time in the hectic schedule, and in Insurance different types of information are
required regarding premium amount, date, new policies etc. and in this all these
types of information are providing to customers through electronic mode in
which customers are more satisfied with LIC i.e. 40% while only 12% are
dissatisfied and in RLIC it is only 30%.
11. In the fairness & equity in treatment with customers, only 25% people have
trust on them, while this ratio is 45% in LIC.
12. At the time of maturity period in claim settlement procedure 35% customers are
satisfied with LIC and only 15% customers with RLIC. In which in both the
companies 15% customers are still dissatisfied with their procedure that is very
time taking & lengthy.
LIMITATIONS
The present study is undertaken in LUCKNOW city and data is collected from the
respondents for the year 2013-14. Hence, data pertained to the study is too short and brief for
DIVYA GUPTA 98
generalization. Hence, it would be difficult to draw precise generalizations regarding the
implications of the study. The findings in the study, interpretations and conclusions drawn
could be best seen within these limitations.
RECOMMENDATIONS
AS 35% people are not have any Insurance plan so it has opportunity for RLIC to
generate more number of customers by advertisement campaigns in newspaper,
through television, on radio etc.
To educate the customers about the new products, the company can use SMS service
for reaching its customers. Due to large number of customers, the reach o f the entire
customers in less time may not be possible from its advisors and sales officers. This
can be a less costly medium of taking direct response of the customers. As it does not
disturb the customer.
RLIC should focus on their claim settlement procedure because compare with LIC
people are more satisfied with LIC.
The Reliance should come up with more number of Products for those customers
about 10% of customer are feeling that the product that they purchased does not match
their needs.
This research has been brought up many facts regarding the Customer satisfaction with
compare to LIC most leading Insurance Company. Reliance Life insurance has large number
of products in its portfolio. But the advisors are unable to find out the need of the c ustomers
and they are unable to suggest the right suitable product. By this project, now I can understand
the various factors of insurance industry and how the customer relation is maintained in this
industry. The potential customers are more in number and they are still not secured their life.
DIVYA GUPTA 99
Due to distribution channels, to reach every other customer in shortest time is not possible;
hence company can adopt some of the suggestions.
CONCLUSIONS
After the deep study of insurance sector of India, I can tell that this is the sector, which has
most business opportunities perhaps in India.
Insurance Industry is one of the fastest sectors in India. Insurance sector has been growing by
25% to 30% and it is expected to increase by 50% in coming 5 years. After the opening up of
the insurance sector, it has become much competitive and insurance awareness among people
has increased.
As far as the comparison of Reliance Life Insurance and other players is concerned, there are
both positive as well as negative impacts on both the sides.
For Reliance Life Insurance, the negative aspect is that its market share is low.
For private players the negative aspect is that they have to fight with the public sector giant
which is established player with a high brand value.
But the positive impact is that the life insurance awareness has increased and the business of
Reliance Life Insurance has increased.
ANNEXURE
DIVYA GUPTA 100
Questionnaire for customers
Kindly fill this questionnaire clearly and objectively; it is aimed to identify extent of your
satisfaction with the Reliance Life Insurance Company’s services. For your information
statistical study will be conducted and outcomes will be analyzed in order to redress points of
weakness and consider opportunities to improve and enhance our services. This would have
constructive reflection in rendering services to your satisfaction.
Personal Details (optional):
A. Name: ………………………………….
B. Mobile: ………………………………..
C. Email: …..………………………..
D. Gender
a) Male b) Female
E. Occupation:
a) Student b) Govt. Job
c) Business d) Service
F. Age Group:
a) 18-25 b) 25-40
DIVYA GUPTA 101
c) 40-60 d) Above 60
G. Income level:
a) No income b) Low Income
c) Medium Income d) d) High Income
H. Do you have any Insurance Policy?
a) Yes b) No
I. If you are not taking any insurance policy then please tell us the reason,
why?
a) I could not afford
b) I don’t see any benefit with it
c) I don’t want Insurance
d) I don’t understand that how it works?
J. What is the p urp o s e fo r b uying ins uranc e P o lic y?
a ) F o r o ld savings
b ) F amily needs
c ) Time to t ime needs
d ) O ppos ite c ircums ta nces
K. On whic h c o mp any d o yo u b elieve mo s t?
a) Relianc e Life Ins uranc e
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b ) Life Ins uranc e Co rp o ratio n
c) Both a & b
L. Do yo u want whic h typ e o f ins uranc e p o lic y?
a) ULIP ( Unit Linked Plan)
b) Traditional plan
c) Health Plan
d) Term plan
M. Are you satisfied with the return on investment which you
getting from policy?
a) Very satisfied
b) Satisfied
c) Can’t say
d) Not much Satisfied
e) Dissatis f ied
N. Extent of your satisfaction with the following:
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Very
Satisfied
Satisfied Can’t
Say
Not much
Satisfied
Dissatisfied
Easy accessibility of
information on the services
RLIC
LIC
Easy of using e- services
RLIC
LIC
Fairness and equity in
treatment
RLIC
LIC
Claim settlement procedure
RLIC
LIC
N. Any Suggestion?
……………………………………………………………
……………………………………………………………
……………………………………………………………
THANK YOU !!
BIBLIOGRAPHY
Textbooks:
1. Marketing Management: 13th Edition A South Asian Perspective
DIVYA GUPTA 104
Philip Kotler, Kevin Lane Keller, Abraham Koshy, MithileshwarJha
Websites:
www.reliancelife.co.in
www.licindia.com
www.google.com
Newspaper:
Business Line
Economic Time
