Ujjwal final sip

A study on how advertisements help in changing the perception of consumers in the Insurance sector

CHAPTER 1 INTRODUCTION TO THE STUDY

CMS Business School, Jain University Page 1


This study is aimed at studying the impact of advertising and its various strategies in the insurance industry. The study also focuses on the role of insurance in general and the role of Birla Sun life Insurance as a governing body for the insurance sector. The study also involves the overview of various players in the market for this specific sector. Indian insurance is a flourishing industry, with several national and international players competing and growing at rapid rates. Thanks to reforms and the easing of policy regulations, so is the increasing role of advertising which effect the consumers’ choice. The study being descriptive and explanatory in nature, findings have been made through theoretical analysis in order to get an insight into the cause and effect relationship of advertising and consumers’ perception relating to insurance products which ultimately effects the insurance industry on a whole. Indian economy is developing and having huge middle class societal status and salaried persons. Their money value for current needs and future desires here the pendulum moves to another side which generate the reasons behind holding a policy. Here the attempt has been made in this research paper to study the buying behaviour of consumers towards life insurance services.

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. With their world market experience and network, these companies have offered many good schemes to lure all type of Indian consumers but unfortunately failed to get the major share of market. Still the LIC is the biggest player in the life insurance market with approx. 65% market share. But why Indian consumers do not trust on many companies and why the major population of India do not have any life insurance policy or what are the factors plays major role in buying behaviour of consumers towards life insurance policies.



1.1.1 Objective of the study To know the awareness of Insurance policies and Insurance

Companies. To understand the Consumer Buyer Behavior for Insurance

Policies. To understand the role of advertisements in creating awareness To understand the impact of advertising on the sales. To conclude on the effect of advertising on sales

1.1.2 Significance of the research

The reason this topic is chosen is to determine customers’ views and impact towards how advertisements help in changing the perception of consumers in the Insurance sector , so that the marketers can use the views and create effectiveness among the customers.

1.1.3 Methodology for collection of data

Data collection is the process of gathering and measuring information on targeted variables in an established systematic fashion, which then enables one to answer relevant questions and evaluate outcomes.

The goal for all data collection is to capture quality evidence that then translates to rich data analysis and allows the building of a convincing and credible answer to questions that have been posed.

Accurate data collection is essential to maintaining the integrity of research. Both the selection of appropriate data collection instruments (existing, modified, or newly developed) and clearly delineated instructions for their correct use reduce the likelihood of errors occurring. A formal data collection process is necessary as it ensures that data gathered are both defined and accurate and that subsequent decisions based on arguments embodied in the findings are valid. The process provides both a baseline from which to measure and in certain cases a target on what to improve.

In this research conducted survey method was being used. Initially a questionnaire was being made, respondents were asked to fill the questionnaire.



From the responses obtained through questionnaire, analysis of the data was being prepared using pie- charts and bar graphs.

1.1.4 Literature Review

The insurance industry thrives on financial marketing organizations selling/marketing products to agencies...and agencies selling/marketing products to agents, who in turn sell to these products to consumers.

Broad advertising is typically done at the consumer level. However, at the end of the day insurance companies must attract agents to sell the products. Matin Khan-“Consumer Behaviour and Advertising Management”, 2006. The author deals with the consumer behaviour as far as the advertising is concerned. The book deals with the usual aspects of consumer behaviour like culture, social class, lifestyle and psychographic segmentation etc. The author also discusses outlet selection, consumerism, customer delight, e-consumer behaviour and changing consumer behaviour in the Indian Context.

Further value addition has been done by discussing ethical and social issues in advertising, management of an advertising. Agency and role of advertising in national development with the help of various Indian examples and case studies. Flemming Hansen, Sverre Riis Christensen “Emotions, Advertising and Consumer Choice. Emotions, Advertising and Consumer Choice focuses on recent neurological or psychological insights originating from brain scanning or neurological experiments on basic emotional processes in the brain and their role in controlling human behaviour. These insights are translated by the authors to cover the behaviour of ordinary individuals in every-day life. The book looks at these developments in the light of traditional cognitive theories of consumer choice and it discusses the implications for advertising and other communication testing. The book offers a first-time thorough review of contemporary thinking in the field of consumer behaviour and an exhaustive amount of empirical evidence to support the authors' notion of an emerging paradigm of emotionally-based consumer choice where mental brand equity becomes a central phenomenon.

India is one of the emerging markets that pose a unique set of challenges to marketers. The importance of the context and the usefulness of concepts in the Indian context is the core proposition. The diversity of a mix of factors such as



cultural aspects, lifestyles, demographics and unbranded offerings make consumer behaviour a fascinating study.

Michael L. Smith (1982) said that a typical life insurance contract provides a package of options or rights to the policy owner that is not precisely duplicated by any other combination of commonly available contracts. Viewed from this perspective, life insurance enjoys a unique position in the field of investments and should be judged in this light. The paper shows that an options viewpoint provides a more complete explanation of policy owner behaviour towards life insurance than the conventional savings-and-protection view.

Michael L. Walden (1985) told that the option's package view of the whole life insurance policy suggests that a whole life policy is a package of options, each of which has value and is expected to influence the price of the policy. This viewpoint implies the general hypothesis that price differences between whole life policies can be explained by differences in policy contract provisions and differences in selected company characteristics. The option's package theory was empirically investigated using regression analysis on data from a sample of policies marketed in North Carolina. The results suggest support for the options package theory.

Kirchler and Angela-Christian Hubert (1999) found that the present study aims at describing spouses’ relative dominance in decisions concerning different forms of investment. As determinants of spouses’ dominance, partnership characteristics, such as partnership role attitudes, marital satisfaction and individual expertise in relation to different investments, were considered. A questionnaire on spouses’ dominance in making decisions on various investments, on the characteristics of particular investments and on partnership characteristics was completed by 142 Austrian couples. Basically, wives appeared to adapt to the dominance exerted by their husbands in savings and investment decisions. Wives’ dominance was highest in egalitarian partnerships, where autonomic and wife-dominated decisions were reported more frequently than in traditional partnerships. Additionally, spouses’ relative expertise in relation to the investments in question showed strong effects on dominance distribution: Spouses with higher expertise than their partners exerted more dominance in decision-making processes.

Amy Wong, (2004) empirically examined the role of emotional satisfaction in service encounters. Specifically, this study seeks to: investigate the relationship



between emotional satisfaction and key concepts, such as service quality, customer loyalty, and relationship quality, and clarify the role of emotional satisfaction in predicting customer loyalty and relationship quality. In doing so, this study used the relationship between emotional satisfaction , service, quality, customer loyalty, and relationship quality as a context, as well as data from a sample survey of 1,261 Australian retail customers concerning their evaluation of their shopping experiences to address this issue. The results show that service quality is positively associated with emotional satisfaction, which is positively associated with both customer loyalty and relationship quality. Further investigations showed that customers' feelings of enjoyment serve as the best predictor of customer loyalty, while feelings of happiness serve as the best predictor of relationship quality. The findings imply the need for a service firm to strategically leverage on the key antecedents of customer loyalty and relationship quality in its pursuit of customer retention and long-term profitability. Helmut Gründl, Thomas Post, Roman Schulze, (2005) found that demographic risk, i.e., the risk that life tables change in a nondeterministic way, is a serious threat to the financial stability of an insurance company having underwritten life insurance and annuity business. The inverse influence of changes in mortality laws on the market value of life insurance and annuity liabilities creates natural hedging opportunities.

Evan Mills, Ph.D.(1999) Studied the insurance industry is rarely thought of as having much concern about energy issues. However, the historical involvement by insurers and allied industries in the development and deployment of familiar technologies such as automobile air bags, fire prevention/suppression systems, and anti-theft devices, shows that this industry has a long history of utilizing technology to improve safety and otherwise reduce the likelihood of losses for which they would otherwise have to pay. We have identified nearly 80 examples of energy-efficient and renewable energy technologies that offer “loss-prevention” benefits, and have mapped these opportunities onto the appropriate segments of the very diverse insurance sector (life, health, property, liability, business interruption, etc.).

Some insurers and risk managers are beginning to recognize these previously "hidden" benefits.

Roger. A. Formisano (1981) examined, via consumer interviews, the impact of the National Association of Insurance Commissioner's Model Life Insurance



Solicitation Regulation as implemented in New Jersey. A substantial portion of the insurance buyers sampled did not become aware of the provisions of the regulation aimed to improve their buying ability. Further, many life insurance buyers were not well informed concerning the nature and operation of life insurance contracts, and in particular, the life insurance policies that they had purchased.



CHAPTER II INDUSTRY PROFILE

2.1.1 Introduction to Insurance



Insurance occupies an important place in the complex modern world since risk,

which can be insured, has increased enormously in every walk of life. This has

led to growth in the insurance business and evolution of various type so

insurance covers. The insurance sector acts as a mobilizer of savings and a

financial intermediary and is also a promoter of investment activities. It can

play a significant role in the economic development of a country, while

economic development itself can facilitate the growth of the insurance sector.

Insurance is a mechanism that ensures an individual to thrive on adverse

consequences by compensating the individual, his/her loss financially. Every

individual in the world and all activities connected with him/her, be it life,

profession, business, travel or any other pursuits are subject to unforeseen and

uncalled for hazards or dangers. The benefit that an individual enjoys in his life

by owning a car or a house or a factory can be snatched by sudden accident

which canrender even the individual immobile, and his family vulnerable. At

this critical juncture, only insurance helps him not only to survive but recover

his loss and continue his life in a normal manner, which would otherwise be

unthinkable.

Insurance can be classified broadly into :( a) life insurance, and (b) general or

non-life insurance. (a)Life insurance or life assurance is a contract between the

policy owner and the insurer, where the insurer agrees to pay the designated

beneficiary a sum of money upon the occurrence of the insured individual’s

death or other event, such as terminal or critical illness. In return, the policy

owner agrees to pay a stipulated amount at regular intervals or in lump sums.

Life-based contracts tend to fall into two major categories:

Protection policies: designed to provide a benefit in case of a specified event,

typically against lump sum payment. A common form of this policy is term

insurance.



Investment policies: the main objective is to facilitate the growth of capital by

single or regular premiums. The common forms in this category include whole

life, universal life and variable life policies.

General insurance or non-life insurance policies, including automobile and

homeowners’ policies, provide payments depending on the loss from a

particular financial event. General insurance typically comprises any insurance

cover that is not deemed to be life insurance. Some categories of general

insurance policies are: vehicle, home, health, property, accident, sickness and

unemployment, casualty, and credit. The terms of insurance generally depend

on the company providing the cover.

2.1.2 How life insurance works?

There are three parties in a life insurance transaction; the insurer, the insured,

and the owner of the policy (policyholder), although the owner and the insured

are often the same person. For example, if John Smith buys a policy on his own

life, he is both the owner and the insured. But if Mary Smith, his wife, buys a

policy on John's life, she is the owner and he is the insured. The owner of the

policy is called the grantee (he or she will be the person who will pay for the

policy). Another important person involved is the beneficiary. The beneficiary

is the person or persons who will receive the policy proceeds upon the death of

the insured. The beneficiary is not a party to the policy, but is designated by the

owner, who may change the beneficiary unless the policy has an irrevocable

beneficiary designation. With an irrevocable beneficiary, that beneficiary must

agree to changes in beneficiary, policy assignment, or borrowing of cash value.

2.1.3 INDUSTRY PROFILE



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.

A BRIEF HISTORY OF THE INSURANCE SECTOR - 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 economic reforms initiated in the early 90s paved the way for the growth

and opening up of the financial sector, which led to a sustained period of

economic growth. The insurance industry was opened up for private players in

2000, and has seen tremendous growth over the past decade with the entry of

global insurance majors. India is fast emerging as one of the world‘s most

dynamic insurance markets with significant untapped potential. The insurance



sector plays a critical role in a country‘s economic development. It acts as

mobilize of savings, a financial intermediary, a promoter of investment

activities, a stabilizer of financial markets and a risk manager. The life

insurance sector plays an important role in providing risk cover, investment and

tax planning for individuals; the non-life insurance industry provides a risk

cover for assets.

Boasting of the largest number of operational life insurance policies in the

world, the Indian insurance industry has emerged as a serious destination in the

global insurance market. Until 1999, the business of insurance in India was the

exclusive privilege of two state-owned corporations— the Life Insurance

Corporation of India (LIC) and the General Insurance Company of India (GIC).

The Government of India took a major step towards liberalization of this

industry in March 2000 and brought into effect the Insurance Regulatory

Development Authority Act (IRDA Act).

The IRDA Act opened the market by doing away with all entry-level

restrictions on private insurers. Thereafter, it has been four years of consistent

growth. With the current potential premium income of the country estimated

India is seen as the sixth largest market in the world. While 80% of its

population remains without life insurance and some of the world's lowest health

and non-life insurance cover levels, the potential of the world's seventh largest

and second most populous country cannot be overlooked. Prospective insurers

have a lot to gain from the 312 million middle-class consumers in India, who 10

have the financial ability to purchase insurance. With only 2.5% of the country's

insurable population currently insured, the market still needs to be tapped

effectively.

2.1.4 THE INDIAN INSURANCE MARKET



From the Indian Life Insurance Company Act in 1912 to the 1RDA Act; in

1999, regulation of insurance business in the country has come a long way.

Insurance is a subject of federal law and all insurance business in India has been

nationalized. The two major legislations dealing with insurance are the

Insurance Act, 1938 and the IRDA Act, 1999. Marine insurance in the country

is governed by the Indian Marine Insurance Act, 1963. Similarly, fire and

marine insurance are dealt with under the Insurance Act, 1972 and the: General

insurance Business (Nationalization) Act, 1972. These enactments contain

provisions relating to the constitution, management and winding up of insurance

companies and the conduct of those types of insurances.

A Tariff Advisory Committee (TAC) is established under the Insurance Act to

regulate rates, terms, conditions and advantages that maybe offered by insurers

for General Insurance Business relating to Fire, Marine (Hull), Motor,

Engineering and Workmen's Compensation in India. In 1999, the IRDA was set

up under the IRDA Act. Companies, aspiring to carry on insurance and

reinsurance business in India, are required to register with IRDA, which is the

sole authority for granting licenses to agents. There is neither a restriction on the

license numbers that may be granted nor a system of composite licenses for life

and non-life insurance companies in India. Insurance companies are strictly

forbidden from dealing with products beyond their scope of license. This

implies that, a life insurance company cannot sell non-life insurance and vice

versa. Insurance agents are, however, allowed to sell both life and non-life

products (composite insurance).

In tune with the Indian government's system of checks and balances imposed

through sector specific Foreign Direct Investment (FDI) limits, IRDA prohibits

100% foreign ownership of an Indian insurance company. An Indian promoter

is required to invest either wholly or team up with a foreign insurer, which can

own no more than 26% of the shares in any new venture. The Indian promoter



must then sell the majority of his shares to the Indian public through a public

offering after 10 years and retain only up to 26% of the shares that is, the same

percentage as that of the foreign investor. IRDA is careful in granting licenses

and has set up strict standards for all aspects of insurance in India. With the

limit on FDI in the sector, the government ensures that state-run agencies such

as the LIC and GIG can maintain their prominence. In June 2003, the Law

Commission prepared a paper identifying 13 potential grounds of revision to the

Insurance Act and the IRDA Act, including merger of relevant provisions of the

two acts, as well as harmonization of the Insurance Act with other rules and

regulations in the sector. The finance ministry is already working towards

comprehensive amendments to the Insurance Act and the IRDA Act, which will

further simplify procedural issues. A major indication of the government's

efforts to invite Private Indian and foreign insurers to invest in the liberalized

market is the FDI cap hike announced by the finance ministry in 2004. These

changes, however, require formal amendments to the IRDA Act, which are still

to be adopted.

2.1.5 Major Players in the Market

The Indian insurance sector till recently comprised of only two state insurers—the LIC, for life insurance, and the GIG, for general insurance. In December 2000, GIG subsidiaries (Oriental Insurance Co. Ltd., New India Assurance Co. Ltd., National Insurance Co. Ltd. and United India Insurance Co. Ltd.) were restructured as independent insurance companies. At the same time, GIG itself was converted into a national reinsurer. In July 2002, Parliament passed a bill, which cut the formal relationship between the four subsidiaries and GIG.

In December 2000, GIG subsidiaries (Oriental Insurance Co. Ltd., New India Assurance Co. Ltd., National Insurance Co. Ltd. and United India Insurance Co. Ltd.) were restructured as independent insurance companies. At the same time, GIG itself was converted into a national reinsurer. In July 2002, Parliament passed a bill, which cut the formal relationship between the four subsidiaries and GIG.



Private Players- Life and Non-Life Insurance Begun in 1818, with the establishment of the Oriental Life Insurance Company in Calcutta, the business of life insurance in India has come a long way. The most popular products in this sector are 'Endowment' and 'Money Back' policies. More than 80% of the Indian life insurance business comes from these two products.

The major players in this field include:

Birla Sun Life Insurance Co. Ltd.

Dabur CGU Life I nsurance Company Pvt. Ltd.

Bajaj Allianz Life Insurance Co. Ltd.

ICICI Prudential Life Insurance Co. Ltd.

Aviva Life Insurance Co. Ltd.

Metlife India Insurance Co. Pvt. Ltd.

ING Vysya Life Insurance Co. Pvt. Ltd.

Life Insurance Corporation of India

Max New York Life Insurance Co. Ltd.

Om Kotak Mahindra Life Insurance Co. Ltd.

SBI Life Insurance Co. Ltd.

HDFC Standard Life Insurance Co. Ltd.

Tata AIG Life Insurance Co. Ltd.

Reliance Life Insurance Co. Ltd

Consistent growth has been observed in the private insurance markets. Though LIC has been in the country for a long time, it didn't tap much of the rural market. It only concentrated on the endowment and money back policies. Private insurers had taken an advantage of this and had come out with innovative products like Unit-Linked Insurance Products (ULIPs). As a competition now, LIC had also started coming out with ULIPs.

The private insurance market has grown despite the continued existence of the public sector providers. LIC has concentrated on retaining its market in



traditional products like endowment and money back policies, and has not slackened its hold in the rural areas. This has prompted many of the private companies to market new and innovative products as a means of competition.

LIC in turn is now moving towards new products like unit linked life products which to date have mainly been sold by the private sector.

The non-life sector primarily consists of fire and miscellaneous risk insurance policies. Also, since motor vehicle cover is compulsory in India, it acts as another chief source of business in the non-life sector. Major players in the non-life sector in India include:

Allianz Bajaj General Insurance Co. Ltd.

ICIC1 Lombard General Insurance

IFFCO Tokyo General Insurance

Reliance General Insurance

Royal Sundaram Alliance Insurance

2.1.6 Global Scenario

The international insurance industry is one of the largest sectors of finance. It

ranges from consumer to corporate and industrial insurance, and even

reinsurance, or insurance of insurance. The major insurance markets of the

world are obviously the US, Europe, Japan, and South Korea. Emerging

markets are found throughout Asia, specifically in India and China, and are also

in Latin America.

With the internet and other forms of high-speed communication, companies and

individuals are now able to purchase insurance and related financial products

from almost anywhere in the world. Increasing affluence, especially in

developing countries, and a rising understanding of the need to protect wealth

and human capital has led to significant growth in the insurance industry.



Given the evolving and growing socio-economic conditions worldwide,

insurance companies are increasingly reaching out across borders and are

offering more competitive and customized products than ever before.

Global insurance platform has witnessed a phenomenal change over the past

decade. The forces of globalization and liberalization have brought the

insurance companies across the world closer to each other than ever before. The

insurance landscape has changed significantly over the years due to many

unforeseen incidents around the world like 9/11, SARS, derailment of corporate

governance, natural disasters like Tsunami, Hurricane Katrina etc.

Outsourcing is another major development in the insurance sector. Waning

margins, massive claims disbursement and increasing competition in recent

years, especially post 9/11, have compelled insurance companies to opt for

outsourcing, to improve efficiency and channelize resources towards the core

functions like product development and innovation.

Over the past ten years, global insurance premiums have risen by more than

50%, with annual growth rates ranging between 2 and 10%.Top ten global

insurance companies are americanintl group(USA), AXA group (france), allianz

worldwide(germany), Manulife financial (Japan),General group (italy),

prudential financial (united states), met life (united states), Aviva(united

kingdom) and Aegon(Netherland).

Countries Insurance

Penetration(premium as a% of

Insurance Density (Per

CapitaPremiums in USD



GDP)Insurance Density (Per

CapitaPremiums in USD)

United Kingdom 12.71 3028.5

Japan 8.70 3165.1

United States 4.48 1611.4

India 1.77 7.6

Australia 6.04 1193.5

China 1.12 9.5

Table 1: Insurance density and penetration at global level

FOREIGN INFLUX In the last three years, despite the equity ratio

restrictions, foreign companies have collectively managed to corner a

considerable share of the Indian insurance market. Investment generally takes

two forms: Outsourced BPO operations and direct shareholding. A recently

published Research and Markets Report in an American insurance journal

emphasized this trend and set out advantages for the US companies to consider

India as an insurance BPO center. Some of the advantages include: Established

destination for outsourcing, low costs, near-shore services, Indian IT

outsourcers extending relationships with insurers, and Indian vendors expanding

to establish a multi-location presence to minimize the risk to their business from

foreign competition.

2.1.7 Indian Scenario



With a huge population base and large untapped market, insurance industry is a

big opportunity area in India for national as well as foreign investors. India is

the fifth largest life insurance market in the emerging insurance economies

globally and is growing at 32-34% annually. This impressive growth in the

market has been driven by liberalization, with new players significantly

enhancing product awareness and promoting consumer education and

information. The strong growth potential of the country has also made

international players to look at the Indian insurance market. Moreover,

saturation of insurance markets in many developed economies has made the

Indian market more attractive for international insurance player.

Growth Insurance business in India is growing at the rate of 15-20% annually

and IRDA has estimated that it is currently of the order of Rs. 812.50 cr. When

combined with banking services, it adds about 7% of the country's GDR

Insurance penetration (i.e., premiums as percentage of GDP) has increased from

2.32% in 2000 to 2.88% in 2003. Likewise, insurance density (i.e., premium per

capita) has increased from Rs. 435.897 in 2000 to Rs. 722.092 in 2003.

Such changes have caused a climb in the country's ranking from 23rd in the

world—in terms of total premium volumes—in 2000, to 19th in 2003. India's

share in the world market has increased from 0.41% to 0.59% during the same

period.

There has been an 83% increase in the premium collected in the three years

following the passage of the IRDA Act. As already noted, the total premium

collected by the insurers both life and nonlife in the year 2004-05 is estimated to

be about Rs. 253.43 bn during the fiscal year 2004-05, (Rs. 66 bn in life and

about Rs. 176.1 bn in non-life premiums). By comparison, estimates for the year

2000-01 put the total premiums at about Rs. 440 bn (Rs. 352 bn in life and Rs.



88 bn in non-life premiums). The average size of life insurance cover before

privatization was around Rs. 50,320. That has since risen to about Rs. 80,500.

The state-owned life insurer—LIC, along with 13 private players, mopped up

Rs. 65.22 bn in premium in the first four months of this fiscal by selling about

62 lakh new policies. And 55 lakh new policies have been sold by LIC alone

which helped it to make an 8.74% rise in premium income at Rs. 49.7 bn during

April-July, this fiscal. The traditional life insurance cover, provided by LIC, has

so far been dominated by the savings policies. Term life' policies have

accounted for less than 2% of the insurance premium of LIC. The new life

insurance companies are concentrating on term life policies in the hope that this

will be their main stream of business. Private players have an average policy

size of Rs. 1, 15,000. The 13 private players have increased their market share

to 23.81% from 17.28% in 2004. In the forefront is Birla Sun life with a market

share of 7.12% making a 49% growth in business at Rs. 4.64 bn. Then comes,

Bajaj Allianz, HDFC Standard, Tata AIG, ICICI Prudential, SBI Life, Max

New York and Aviva.

The Indian Insurance Market - The insurance industry of India consists of 52

insurance companies of which 24 are in life insurance business and 28 are non-

life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the

sole public sector company.

Out of 28 non-life insurance companies, there are six public sector insurers,

which include two specialised insurers namely Agriculture Insurance Company

Ltd for Crop Insurance and Export Credit Guarantee Corporation of India for

Credit Insurance. Moreover, there are 5 private sector insurers are registered to

underwrite policies exclusively in Health, Personal Accident and Travel

insurance segments. In addition to 52 insurance companies, there is sole

national re-insurer, namely, General Insurance Corporation of India. Other



stakeholders in Indian Insurance market include approved insurance agents,

licensed Corporate Agents, Brokers, Common Service Centres, Web-

Aggregators, Surveyors and Third Party Administrators servicing Health

Insurance claims.

Insurance Laws (Amendment) Act, 2015 provides for enhancement of the

Foreign Investment Cap in an Indian Insurance Company from 26% to an

Explicitly Composite Limit of 49% with the safeguard of Indian Ownership and

Control.

2.1.8 Contribution of life insurance in development of economy

Contribution of Life Insurance Sector in the Economy

Flow of Insurance Industry in India

Structure of insurance industry: Snap Shot Industry

Aggregation of long term savings

Spread of financial services in rural Areas

Long term funds for infrastructure development of capital Markets/ Economic

Growth

➢Employment generation

2.1.9 GDP Contribution

1. Contribution of insurance to employment - Insurance helps create both

direct and indirect employment in the economy. Alongside regular jobs in

insurance, there is always demand for a range of associated professionals such

as brokers, insurance advisors, agents, underwriters, claims managers and

actuaries.

The increasing insurance business has increased the demand for highly skilled

professionals as well as semiskilled and unskilled people.



2. Contribution of insurance to infrastructure- Generally, countries with

strong insurance industries have a robust infrastructure and strong capital

formation. Insurance generates long-term capital, which is required to build

infrastructure projects that have a long gestation period. Concurrently, insurance

protects individuals and businesses from sudden unfavourable events. A well

developed and evolved insurance sector is needed for economic development as

it provides long term funds for infrastructure development and simultaneously

strengthens the risk taking ability.

3. Strong Complementarities between Insurance and Banking- Insurance

and banking system deepening appear to play complementary roles in the

growth process. Although insurance and banking separately each make positive

contributions to growth, their individual contributions are greater when both are

present. There is also some evidence that the development of insurancemarkets

contributes to the health of securities markets.

4. Contribution of insurance to FDI- The importance of FDI in the

development of a capital deficient country such as India cannot be

undetermined. This is where the high-growth sectors of an economy play an

important role by attracting substantial foreign investments. Currently, the total

FDI in the insurance sector, which was INR50.3 billion at the end of FY09, is

estimated to increase to approximately INR51 billion in FY10. It is difficult to

estimate, but an equal amount of additional foreign investment, can roughly

flow into the sector if the government increases the FDI limit from 26% to 49%.

5. Insurance Contributes Positively to Economic Growth- The deepening of

insurance markets makes a positive contribution to economic growth. While life

insurance is causally linked to growth only in higher income economies, nonlife

insurance makes a positive contribution in both developing and higher income

economies. Some research suggests that the positive contribution of life



insurance to growth is primarily through the channel of financial intermediation

and long term investments. However, it is important to note that these studies do

not address the important contributions to individual and social welfare from

risk management.

2.1.10 Segments of the market

Two Major Segments of the Insurance Industry

Type of Insurer Covered Contingencies

Property Casualty Insurance Physical Damage, Liability, Health, Disability

Life Insurance Life, Annuities, Health, Disability

Casualty Insurance -Relatively short premium payment period 1 to 2 years

Coverage maybe short in duration – year or two, however Claims may occur

many years after insurance period ends

Asset investments tend to be short term in nature –More in equities than bonds,

emphasis on corporate Securities.

Life Insurance -Relatively long premium paying periods 30 years or longer for

Life insurance, although group coverages for individuals can be 5 or 10 years

in length.

Claims generally occur after many years while the insurance Contract is in-

force

Asset investment allocation tends to be long term – with emphasis on US

Government Bonds, High Grade Corporate Bonds, Securitized Mortgage

Obligation backed by the Federal Government.

2.1.11 Market Segmentation



In addition to 52 insurance companies, there is sole national re-insurer, namely,

General Insurance Corporation of India. Other stakeholders in Indian Insurance

market include approved insurance agents, licensed Corporate Agents, Brokers,

Common Service Centres, Web-Aggregators, Surveyors and Third Party

Administrators servicing Health Insurance claims.

Insurance Laws (Amendment) Act, 2015 provides for enhancement of the

Foreign Investment Cap in an Indian Insurance Company from 26% to an

Explicitly Composite Limit of 49% with the safeguard of Indian Ownership and

Control. Recently, the insurers have become increasingly aware of the possible

improvements in productivity and resulting economies to scale by using Market

Segmentation when appealing to new customers or promoting insurance

services to present customers. Therefore, the key to market segmentation is to

take the so called mass market with a heterogeneous set of needs and through

the use of creative research efforts divide it up into smaller parts or segments

thus giving the insurance marketer some direction in shaping his product

offerings.

Types of Insurance market Segmentation

There are three major types of Insurance market segmentation:-

(1) Psychographic Segmentation- Psychographic segmentation utilizes

consumer life styles and personality differences to determine variances

in buyer demands. For example, the insurance companies market

differently to swingers (i.e. young, unmarried, active fun loving party

going people etc, fast- paced (hedonistic living) than to “Plain Joes”

(Older, Married family centered people).

Usefulness of psychographic Segmentation:



(1) Projecting behaviour: - By identifying a customer segment and

understanding why its members are interested in making an insurance related

decision, it is possible to estimate the probability that they will react in a

certain way or at least predict several possible reactions.

(2) Client Interaction: - The process of psychographic segmentation allows

more effectivecommunication between a customer and the insurer as a more

meaningful dialogue withmore information flowing both ways.

(3) Anticipation of Future Market needs: - With valuable information

flowing in from customers, it will provide a better opportunity to analyse

future customer requirements. It will also help to provide a basis for

determining future insurance objectives.

(2) Segmentation by Life Cycle: - Hass and Barry in their book “Systems

selling of Retail Services” advocate the classification of financial

customers into household according to the stages in the life cycles.

There is ample evidence according to them that the financial needs and

expectations of households will vary according to stages in the cycle.

For example, young married couples with no children have the same

size household as older couples whose children no longer live at home.

The insurance needs of these two segments which an insurance marketer

should identify would tend to differ in certain respects.

(3) Social Class Segmentation- Insurers traditionally used purely

demographic information to analyse their customers and initially,

segmentation in insurance was basically along demographic lines.

Categories such as age, sex, education, income, family size and religion

were used. In fact, in some cases terms such as housewives, customers,

men, women, buyers, investors or savers were used casually, but it was



soon realized that this form of segmentation was very general and often

used as a matter of convenience.

2.1.12 Growth rate of insurance industry in India

In FY15, the insurance industry is witnessing a growth rate of around 12-

13%.Some of the drivers for growth in Insurance market in the next fiscal are -

‘Make in India’ initiative, investment in infrastructure, smart cities initiative and

increased consumption. These initiatives are likely to result in increased number

of projects that are likely to come up, increased trace activity leading to growth

in marine, increased growth in automobile sales leading to growth in Auto

Insurance.

Good sentiment would also lead to increased travel both within and outside

India leading to buoyant travel insurance.

The implementation of the seventh pay commission, which will increase the

pay-scale and give more purchasing power to the Government employees would

also lead to more demand for automobiles, thereby contributing to growth in

auto insurance market. Insurance being a capital intensive business an increase

in FDI gives them the opportunity to invest to grow their business in India by

investing in developmental activities like channel development and digital

initiatives. With our PM’s ‘Make in India’ effort and other reforms, we see an

upsurge in the manufacturing sector which is proving to be a boon for the

growth of Property and Marine Cargo insurance. Also the stalled infrastructure

projects would finally kick off in 2016, thereby boosting the engineering

insurance sector as well. Additionally the environment concerns and related

actions will largely impact the growth of the auto industry and auto insurance

space.



The industry is on its way to development and a number of factors govern that

growth. Some of them are:

Significantly untapped latent potential: India’s insurance industry has

witnessed rapid growth during the last decade. Consequently, many foreign

companies have expressed their interest in investing in domestic insurance

companies, despite the Government of India’s regulation, which mandates that

the foreign shareholding limit is fixed at 26% for the life as well as non-life

insurance sectors. How can this potential be tapped efficiently? This report

analyzes the issues of the industry and suggests methods to overcome them.

Recent regulatory developments that govern the current market state: The

development of the insurance industry in India is likely to be critically

dependent on the nature and quality of regulation. Overall, the regulatory

environment is favourable and takes care that players maintain prudent

underwriting standards, and reserve valuation and investment practices. The

primary objective for the current regulations is to promote stability and fair play

in the market place. Our report details some major regulations by the IRDA as

well as those concerning ULIPS, IPOs, among others.

2.1.13 PESTLE Analysis

Political:

Insurance business in rural and urban sector

Capital requirement

Renewal of registration

Investment of funds outside India

Power to investigation or inspection

INCREASED SERVICE TAX ON PREMIUM:



The imposition of service tax on the services provided by the insurers has been

increased significantly over past few years by the government.

ENDING OF GOVERNMENT MONOPOLY:

A great revolution in the insurance sector came in the year 1999 when IRDA

passed the bill, lifting all entry restrictions for private players and allowing

foreign players to enter the market with some limits on direct foreign

ownership.

INCREASE IN FDI LIMIT:

The hike in the insurance foreign direct investment (FDI) limit to 49 per cent

from 26 per cent has proved to be very beneficial for the insurance industry in

India. It has encouraged foreign investors to invest in Indian insurance industry.

FAVOURABLE REGULATIONS FOR RURAL INSURANCE:

To encourage insurance sector to increase its spread in rural India, government

has made regulations more favourable for rural people by decreasing the

amount of premiums, introducing new group insurance plans and various other

special plans for farmers.

Economic:

Adequacy of capital

Increased economic activity

Interest rates

Inflation rates

Market related factors

Customer satisfaction

INCREASE IN GROSS DOMESTIC SAVINGS:



The gross domestic savings of people in India have increased significantly, due

to which they are moving towards new ways of investing money for the future

benefits including various insurance plans. As compared to previous year

i.e.2007, the insurance industry thus expected to grow by about 40% during this

fiscal year, i.e.2008.

CONTRIBUTION TO COUNTRY’S G.D.P:

According to government sources, the insurance and banking services’

contribution to the country’s gross domestic product is 7% out of which the

gross premium collection by various insurance companies forms a significant

part.

ROLE IN GOVT. SECURITIES MARKET:

Insurance companies are fest emerging as one of the most prominent players in

the govt. securities market. The share of insurance companies in overall

investment in the G-sec market has more than doubled to 23% during 2007-08

from 9% during the previous fiscal year.

BIGGEST DOMESTIC PLAYER IN EQUITY MARKETS:

According to RBI’s annual report for 2007-08, the insurance companies

invested Rs. 35880 crore in the G-sec market, which is over 173.06% higher

than the Rs.13880 crore they invested in 2006-07. Thus insurers have emerged

as the biggest domestic institutional players in the equity markets.

Social :

Population

Lifestyle

Educational level

Level of earning



Societal benefits

LOW INSURANCE COVERAGE:

In India insurance is considered as which is pushed upon the customers to buy.

People are unwilling to buy insurance due to lack of awareness.

INCREASE IN LIFE SPAN AND RISE IN ELDERLY POPULATION:

In India life span has increased over past few years due to which the elderly

population in India is rising day by day. To live a happy and independent life,

more no. of educated peoples is moving towards investing in insurance to

ensure a respectful and independent life even in old age.

UNCERTAINITY ABOUT LIFE:

Due to increasing no. of events of terrorist attacks in various parts of the

country, people have started viewing life as more uncertain. It has developed a

kind of fear factor in the minds of people leaving them more worried about their

family and kids. Due to this reason they are moving more and more towards

buying insurance policies in order to secure their family’s future.

CHANGING INDIAN PERCEPTION:

In India earlier people used to view insurance as a tax saving device or as a

method of investment. But, nowadays a great change in the perception has

come. People have started realizing the importance of getting insured. Now

more no. of people is viewing it as a transfer of risk for a good future.

CHANGE IN FAMILY SYSTEM:

Since past, joint family system was the most prevalent in all the stratus of

Indian society. At that time, in case of a man’s death, there were other people in

the family to take care of his wife and kids. But, with the passage of time, a big



change in our culture has come. More no. of people are moving towards nuclear

family system. In today’s scenario there is no one to help a widow and her kids

because everyone is busy with his/her family. In such a situation more no. of

people are opting for insurance to secure their spouse and children’s future.

INCREASE IN LIFE STYLE DISEASES:

Due to modernization, the life has become very fast. Many changes have taken

place in the life style of people, due to which a large no. of new life style

diseases have made their place in our country. Thus, more no. of people is

opting for health insurance etc to lead a better and more secured life.

Technological:

Maintaining the database

E-business insurance in India

AUTOMATION OF PROCESSES:

Nowadays, with advancement in technology the whole process of insurance has

become automated. Earlier it used to take 15days to 45days for the issuance of

policy documents. But, nowadays the whole process gets completed within 5 to

7 days.

INTERNET DRIVEN INFORMATION ERA:

With an increase in internet usage and its increasing spread, it has become

easier for people to get informed about everything at their home only. Now they

don’t have to waste time in gathering information before taking any financial

step. Every information is now a days is available on the net.

BUSINESS PROCESS MONITORING:



It has become easier fo0r people to track every event in a business process. It

has resulted in more transparency in every aspect of business processing.

Legal

Despite strong improvement in penetration and density in the last 10 years,

India largely remains an under-penetrated market. The market today is primarily

dependent on push, tax incentives and mandatory buying for sales. There is very

little customer pull, which will come from growing financial awareness and

increasing savings and disposable income. In the long run the insurance industry

is still poised for a strong growth as the domestic economy is expected to grow

steadily. This will lead to rise in per capita and disposable income, while

savings are expected to be stable.

Insurance growth drivers:

The demand for insurance products is likely to increase due to the exponential

growth of household savings, purchasing power, the middle class and the

country’s working population. Listed below, are the various underlying growth

drivers for India’s insurance industry:

Growing of the financial industry as a whole

Growth of life and non-life industry

Promoting innovation and removing inefficiency

Competition and orderly growth

Growth of specific insurance segments such as motor insurance

Emerging trends

Multi-distribution i.e. increasing penetration through new modes of

distribution such as the internet, direct and telemarketing and NGOs



Product innovation i.e. increased levels of customization through product

innovation

Claims management i.e. timely and efficient management of claims to

prevent delays which can increase the claims cost

Profitable growth i.e. expanding product range, developing innovative

products and expanding distribution channels

Regulatory trends i.e. mandated regulatory changes by the IRDA to promote

a competitive environment in both the life and non-life insurance sectors.

Environmental

The environmental liability risk (i.e. the financial risk associated with

environmental pollution and contamination).

The natural catastrophe risk (i.e. the risk of major damages in connection with

the occurrence of natural disasters, such as earthquakes, floods or other extreme

environmental conditions). Both these environment-related risks, as mentioned,

are characterized by the potential for catastrophic consequences. However, even

if they may share some common features, they are structurally different from

the standpoint of the insurer and, therefore, they deserve to be treated separately

in this report. After a brief overview (Part I) of the traditional functioning of the

insurance and reinsurance mechanisms and an introduction to the general

problems affecting the insurability of certain risks, Part II of this study deals

with the risk of liability for environmental pollution, taking into account both

factual and legal variables that may affect risk insurability. Environmental

liability risk, in fact, is highly influenced by the underlying legal and regulatory

framework. In this perspective, a theoretical discussion of the most relevant

features of an environmental liability regime is followed by a comparative

analysis of the policy choices already implemented in various legal systems



belonging to both the civil law and the common law traditions, as well as by the

evaluation of the most recent developments that are taking place.

2.1.14 Company Profile

Birla Sunlife Insurance Pvt. Ltd.

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between

the Aditya Birla Group and Sun Life Financial Inc., a leading international

financial services organisation. The local knowledge of the Aditya Birla Group

combined with the expertise of Sun Life Financial Inc., offers a formidable

value proposition to customers. Sun Life Financial and its partners today have

operations in key markets worldwide, including India, Canada, the United

States, the United Kingdom, Hong Kong, Philippines, Japan, Indonesia, China

and Bermuda. Sun Life Financial Inc. had assets under management of over

US$ 386.82 billion, as on 31 March 2007. Sun Life Financial Inc. is a leading

performer in the life insurance market in Canada. BSLI in its five successful

years of operations has contributed significantly to the growth and development

of the life insurance industry in India. It pioneered the launch of Unit Linked

Life Insurance plans amongst the private players in India. It was the first player

in the industry to sell its policies through the Bank assurance route and through

the internet. It was also the first private sector player to introduce a pure term

plan in the Indian market. This was supported by sales practices, which brought

a degree of transparency that was entirely new to the market. The process of

getting sales illustrations signed by customers, offering a free look period on all

policies, which are now industry standards were introduced by BSLI.

Being a customer centric company, BSLI has invested heavily in technology to

build world class processing capabilities. BSLI has covered more than one and a

half million lives since inception and its customer base is spread across 100

cities in India. All this has assisted the company in cementing its place amongst



the leaders in the industry in terms of new business premium income. Birla Sun

Life Insurance (BSLI), one of the leading private life insurers in India today

announced the inimitable achiever, cricketer Kapil Dev as their corporate brand

ambassador. The cricketing supremo will be endorsing BSLI in all its marketing

initiatives. Birla Sun Life Insurance is a value

driven brand which has a national brand recall of 70 per cent. The objective of

appointing a brand ambassador is to grow its brand recall as it goes national in

its distribution reach and fuel business growth. As a brand ambassador, Kapil

Dev will play a key role in the brand and product marketing and promotional

activities. BSLI has always used an integrated marketing approach, which will

be strengthened further.

Birla Sun Life Insurance (BSLI), in its five successful years of operations, has

contributed significantly to the growth and development of the life insurance

industry in India. It pioneered the launch of unit linked life insurance plans

amongst the private players in India. It was the first player in the industry to sell

its policies through the banc assurance route and through the internet. It was the

first private sector player to introduce a pure term plan in the Indian market.

This was supported by sales practices which brought a degree of transparency

that was entirely new to the market. The process of getting sales illustrations

signed by customers and offering a free look period on all policies, which are

now industry standards, were introduced by BSLI. Being a customer-centric

company, BSLI has invested heavily in technology to build world class

processing capabilities. BSLI has covered more than a million lives since

inception and its customer base is spread across more than 1000 towns and

cities in India. All this has assisted the company in cementing its place amongst

the leaders in the industry in terms of new business premium income. The

company's current capital base is Rs.520 crore.



2.1.15 About the Aditya Birla Group

The Aditya Birla Group has a turnover close to Rs.38,000 crore (as on 31 March

2008) and is one of the largest business houses in India. It enjoys a leadership

position in all the sectors in which it operates. With over 75 business units

spanning the South East Asian belt, Africa, Canada and the UK among others, it

is reckoned as India's first multinational corporation. The group is anchored by

eight lakh shareholders, with a market capitalization of Rs.53, 400 crore. A US

$29 billion corporation in the League of Fortune 500, the Aditya Birla Group is

anchored by an extraordinary work force of 130,000 employees, belonging to

40 different nationalities. Over 60 per cent of its revenues flow from its

operations across the world.

The Aditya Birla Group is a dominant player in all its areas of operations viz;

Aluminium, Copper, Cement, Viscose Staple Fibre, Carbon Black, Viscose

Filament Yarn, Fertilisers, Insulators, Sponge Iron, Chemicals, Branded

Apparels, Insurance, Mutual Funds, Software and Telecom. The Group has

strategic joint ventures with global majors such as Sun Life (Canada), AT&T

(USA), the Tata Group and NGK Insulators (Japan), and has ventured into the

BPO sector with the acquisition of TransWorks, a leading ITES/BPO company.

2.1.16 About Sun Life Financial Inc

Sun Life Financial Inc. is a leading international financial services organisation

providing a diverse range of wealth accumulation and protection products and

services to individuals and corporate customers. Tracing its roots back to 1865,

Sun Life Financial and its partners today have operations in key markets

worldwide, including Canada, the United States, the United Kingdom, Hong

Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of 31

March 2008, the Sun Life Financial group of companies had total assets under



management of US$ 343 billion. Sun Life Financial Inc. trades on the Toronto

(TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker

symbol "SLF".

Parent Company

Aditya Birla Group & Sun Life Financial Services

Category

NBFC

Sector

Insurance Services

Tagline/ Slogan

‘Zindagikeutarchadavmeijiyovishwaskesaath’; Leaving nothing to chance

USP

Expertise in Insurance across Continents

STP

Segment - Personal and Group Asset Management

Target Group - Urban and Rural Investors

Positioning - Complete Insurance and financial solutions

Competition

Competitors

1. LIC

2. SBI Life Insurance

3. HDFC Standard Lif

2.1.17 Vision And Mission

Vision

To be a world class provider of financial security to individuals and corporate

and to be amongst the top three private sector life insurance companies in India.



Mission

To be the first preference of our customers by providing innovative, need based

life insurance and retirement solutions to individuals as well as corporate. These

solutions will be made available by well-trained professionals through a multi-

channel distribution network and superior technology. Our endeavor will be to

provide constant value addition to customers throughout their relationship with

us, within the regulatory framework. We will provide career development

opportunities to our employees and the highest possible returns to our

shareholders.

2.1.18 Product Profile

Insurance Plans

Life is unpredictable. But in face of adversity, our responsibilities towards our

parents, children and loved ones need not be compromised. Insurance planning

equips respondents to smooth out the uncertainties and adversities that life

might send their way, so that the best that life has to offer, secure in the

knowledge that their beloved ones are well provided for.

BSLI offers a complete range of insurance products

Protection Plans

Savings Plans

Child Plans

Investment Plans



Retirement Plans

Group Plans

Rural Plans

Protection plans

BSLI offers Life Guard - a set of pure protection plans. Choose from amongst

three different product structures to insure their life and provide total security

to their family, at a very affordable cost.

Level Term Assurance with return of premium

o On death the entire sum assured will be paid.

o On maturity, all the premiums paid will be returned.

Level Term Assurance without return of premium


o No survival or maturity benefits.

o Respondents can also enhance the above two policies by adding

Accident & Disability Benefit Rider and Waiver of Premium Rider (WOP).

Level Term Assurance - Single premium:


o No survival or maturity benefits.

SAVINGS PLANS

BSLI offers a variety of policies that give respondents the benefits of

protection and the opportunity to save for important assets or events, like a

home, a car or a wedding.



Invest Shield Cash

A regular premium unit-linked insurance plan with an assurance of Capital

Guarantee with the added advantage of flexible liquidity option. An ideal plan

for long term planning with the benefit of liquidity.

The key features of the plan are:

Flexibility to choose a specific level of protection (Sum Assured), based on a

multiple of the annual premium. Respondents can also choose the term of the

plan.

At the end of the term, the higher of the value of units or the guaranteed value

is paid. On death, Sum Assured along with the higher of value of units or the

guaranteed value is payable.

Facility to make withdrawals from the 6th policy year onwards till the end of

the policy term. Every year withdraw up to 10% of the value of units.

Additional credits payable as a percentage of the initial annual premium are

paid along with the death or maturity benefit.

Additional insurance for 10 years after the maturity, for an amount of 50% of

the Sum Assured.

Flexibility to make additional investment with the help of the top-up facility.

Flexibility to increase / decrease their annual premium amount

Facility of Automatic Premium Payment- With this facility respondents can

take a temporary break from premium payment.

Total transparency with the premium allocations, and other charges declared

upfront.



The guaranteed value of the unit fund is the value of all invested premiums

(premiums net of all charges) along with the declared bonus interests.

With Automatic Premium Payment facility, respondents can avail a temporary

break from premium payment for a maximum of 1 year. This facility is

available once if the premium paying term is less than 15 years and twice, if it is

15 years or more. Respondents can also enhance their policy by adding

Accident & Disability Benefit Rider , Waiver of Premium Rider and Critical

Illness Rider .

Invest Shield Life

A regular premium unit-linked insurance plan with an assurance of Capital

Guarantee. An ideal plan for their long-term savings and protection

requirement

The key features of the plans are



Additional insurance for 10 years after the maturity, for an amount of 50% of

the Sum Assured.


Flexibility to increase / decrease their annual premium amount

Facility of Automatic Premium Payment- With this facility respondents can

take a temporary break from premium payment.


upfront.




(premiums net of all charges) along with the declared bonus interests. With

Automatic Premium Payment facility, respondents can avail a temporary break

from premium payment for a maximum of 1 year. This facility is available once

if the premium paying term is less than 15 years and twice, if it is 15 years or

more. The capital guarantee is applicable only on the invested premium and the

declared bonus interests.

Invest Shield Gold

A unit-linked insurance plan with an assurance of Capital Guarantee which

offers respondents the benefit of a limited premium payment term. An ideal

plan for protection with wealth creation that offers the flexibility of a limited

premium paying term.

Flexibility to choose a premium payment term of 5, 7 or 10 years for a

maturity term of 10, 15 or 20 years respectively.

Flexibility to choose a specific level of protection (Sum Assured), based on a

multiple of the annual premium.

At the end of the term (maturity), the higher of the value of units or the

guaranteed value* is paid. On death, Sum Assured along with the higher of

value of units or the guaranteed value is payable.



Facility to make withdrawals from the 6th policy year onwards till the end of

the policy term. Every year withdraw up to 10% of the value of units


Flexibility to increase / decrease your annual premium amount




upfront.


(premiums net of all charges) along with the declared bonus interests.

The capital guarantee is applicable only on the invested premium and the

declared bonus interests. Respondents can also enhance their policy by adding

Accident & Disability Benefit Rider and Critical Illness Rider.

Premier Life

Presenting Premier Life – The Preferred plan for the Preferred Customer. The

key features of the plan are:

Limited premium payment option: Choose from among a 3, 5, 7 or 10 year

premium paying term.

Choice of sum assured: Choose a sum assured, which is a minimum multiple

of 1 and a maximum multiple of 25 times the annual contribution.

Additional allocation of units on a periodic basis.

Facility to top-up their investment any time respondents have surplus funds.

Choose from among four funds, based on their investment objective and risk

appetite.

Choice to switch between investments options (4 free switches every policy

year).

Lifetime



Presenting Life Time – unit –linked plans that meets their changing needs over

a lifetime. These solutions have been developed to meet their savings,

protection and investment needs at every stage in life.

Protection:-

Choose a specified level of protection (available only with LifeTime).

Two levels of Sum Assured to choose from (available only with LifeTime

II).

Flexibility to increase or decrease their sum assured.

Add-on riders to protect respondents against any eventuality.

Savings :-

Flexibility to increase or decrease their contribution.

Facility of Premium Holiday, wherein the policy continues even if there is a

temporary break in the payment of annual contribution (available only with Life

Time).

Facility of Automatic Cover Continuance, wherein the policy continues even

if there is a temporary break in the payment of annual contribution

Facility to top-up their investment any time respondents have surplus funds.

Additional allocation of units on a periodic basis.

Loans against the policy.

Investment:-

Choose from among four funds, based on their investment objective and risk

appetite.



Choice to switch between investments options (4 free switches every policy

year).

Respondents can also enhance your policy by adding Critical Illness Rider,

Major Surgical Assistance Rider, Accident & Disability Benefit Rider, Accident

Benefit Rider (available only with Life Time) and Waiver of Premium Rider.

SECURE PLUS

An insurance plan that gives added protection, savings and multiple options, all

in one

The flexibility to choose respondents premium contribution.

The flexibility to choose amongst three levels of cover (in the form of sum

assured) for the same amount of total annual contribution.

The flexibility of shifting between the three levels of cover, as you require.

The flexibility of receiving their maturity proceeds as a lump sum or in equal

annual installments over 3 or 5 years.

Respondents can also enhance their policy by adding Variety of Riders.

Cash Plus

An insurance plan that gives respondents added protection, savings, multiple

options, plus the power of liquidity.

The flexibility to choose their premium contribution.

The flexibility to choose amongst three levels of cover (in the form of sum

assured) for the same amount of total annual contribution.

The flexibility of shifting between the three levels of cover, as respondents

require.



The flexibility of receiving their maturity proceeds as a lump sum or in equal

annual instalments over 3 or 5 years.

The flexibility of withdrawing up to 10% of the accumulated value of their

policy, after the first 5 policy years.

Respondents can also enhance their policy by adding Variety of Riders.

Save n Protect

An ideal plan for those who want to accumulate funds on a regular basis while

enjoying insurance protection.

Guaranteed Benefits

Extended Life Cover

Maturity Benefit

Death Benefit

Respondents can also enhance their policy by adding Critical Illness Rider

Major Surgical Assistance Rider , Accident & Disability Benefit Rider , Waiver

of Premium Rider (WOP).

CHILD PLANS

As a responsible parent, respondents will always strive to ensure a hassle-free,

successful life for their child. However, life is full of Uncertainties and even the

best-laid plans can go wrong. Here’s how respondents can give their child a

100% safe and assured tomorrow, whatever the uncertainties. Smart Kid is

especially designed to provide flexibility and safeguard their child’s future

education and lifestyle, taking all possibilities into account.

Choose from amongst a basket of 4 plans:



Smart Kid regular premium

Smart Kid unit-linked regular premium

Smart Kid unit-linked regular premium II

Smart Kid unit-linked single premium II

All these plans offer:

Financial Benefits

Total peace of mind, even if respondents are not around

Sum Assured is paid immediately

All future premiums are waived

Policy benefits continue

Development Allowance All Smart Kid plans can be enhanced with the

Accident & Disability Benefit Rider and Income Benefit Rider.

Respondents can also an Accident Benefit Rider to a Smart Kid Regular

Premium policy, and a Waiver of Premium Rider (WOP) to Smart Kid unit-

linked regular premium policy.

INVESTMENT PLANS

Life link II Life Link II is a unique plan that combines the security of a life

insurance policy with the opportunity of enjoying high returns on their

investments, without the market risks compromising on the protection of their

family!

Death Benefit:



The Sum Assured under the product has 2 options, either 500% of the initial

premium or 105% of the initial premium. In the event of an unfortunate death,

the beneficiary will receive higher of the value of units or the initial death

benefit, less any withdrawals.

Withdrawal Benefit:

One can make partial withdrawals from the accumulated value of the policy

after completion of one policy year.

Flexibility:

Choose from four fund options, based on their investment objective and risk

appetite. If at a later stage their financial priorities change, respondents can

switch between the various fund options, absolutely free, 4 times a year.

RETIREMENT PLANS

Life Expectancy has been rising rapidly and today respondents can expect to

live longer than their earlier generations. For respondents, this increase will

mean a longer retirement life, stretching into a couple of decades. BSLI

Retirement Solutions that combine the best of insurance and investment. These

solutions are developed to ensure their peace of mind for the years to come.

1. Why plan for retirement?

2. How much should I set aside for retirement?

3. The impact of inflation on respondent’s retirement savings

4. Why plan early?

5. About Annuitie



1.Why plan for retirement?

For too many people, the joy of retirement after years of hard work is eclipsed

by the financial uncertainties that it brings. Despite all the planning and saving,

respondents can never sure whether your money will last a lifetime. Retirement

planning offers a way to ensure a more enjoyable, stress free tomorrow. A

prudent plan will ensure that increasing life expectancy, higher inflation and

increasing taxes do not eat away into their hard earned savings.

2.How much must I set aside for retirement?

To ensure a comfortable retired life, respondents would be wise to invest money

into additional avenues like pension plans. How much respondents need to

invest can be answered by answering some questions such as:

1. How long do you have to save that amount before retirement?

2. Where can you invest your retirement money?

3. How much risk are you willing to take on your investments?

GROUP SOLUTIONS:

In an era of competitive parity, the only asset that makes a decisive difference

between corporate success and failure is the quality of human capital. Employee

benefits have proven to be an excellent tool to optimize the retention of talent

and improve an organization’s bottom-line. The quality of an organization’s

employee benefits establishes and maintains a company's image as a caring

employer. Optimum care of employees is a long-term investment that results in

a sustained competitive advantage for an organization in the times to come.

BSLI Group Solutions Advantage



An integrated basket of employee benefits solutions that offer incomparable

flexible benefits.

Sound investment management that focuses on safety, stability and

profitability of the portfolio.

Personalized financial planning for their employee that takes care of his/her

changing financial needs at every stage of life.

Quality service initiatives and transparency across all operations, promising

superlative operational efficiency.

GROUP TERM ASSURANCE:

BSLI flexible group term solution helps provide affordable cover to members of

a group. The cover could be uniform or based on designation/rank or a multiple

of salary, and can be extended to all employees between the ages of 18 and 65

years. The benefit under the policy is paid on the event of the member’s death to

the beneficiary nominated by the member. It is a one-year renewable policy

where one master policy covers all proposed employees comprising the group,

with a minimum group size of 25 persons. New members can join the group and

outgoing members can leave the group at any point during the policy term.

RURAL PLANS:

BSLI Rural Products are designed to meet the needs of the rural consumers.

These products offer the following features:

Low and Affordable Premiums

Life Cover

Savings Option

Hassle free procedure



PLANS FOR NRI’S

Being away from India doesn't mean respondents have to compromise the safety

and security of their loved ones. In fact, their savings from their time overseas

can be easily canalized to meet their family's needs - now and in the future. So,

whether it’s their dream to retire in their hometown; to secure funds for their

children's education; or to build assets, BSLI has a range of solutions that can be

customized to meet their needs.

2.1.19 Products of Birla sun life insurance

The products of BSLI may be mentioned as below:

Protection Solutions

1.BSLI Protector Plan

2.BSLI Protector Plus Plan

3.BSLI Premium Back Term Plan

Retirement Solutions

1.BSLI Classic Life Plan

2.BSLI Immediate Income Plan

3.BSLI Dream Life Plan

4.Health and Wellness Solutions

BSLI Health Plan

1.BSLISaral Health Plan

2.BSLI Universal Health Plan

Children’s Future Solutions

1.BSLIBachat Child Plan

2.BSLI Dream Child Plan

3.BSLI Classic Child Plan

Wealth with Protection Solutions

1.BSLI Foresight Plan



2.BSLI Money Back Plus Plan

3.BSLI Dream Endowment Plan

4.BSLIBachatMoneyback Plan

5.BSLI Vision

6.BSLI Classic Endowment Plan

7.BSLI Guaranteed Bachat Plan

8.BSLI Wealth Max Plan

9.BSLI Rainbow

Rural Solutions

1.BSLIBimaDhanSanchay

2.BSLIBimaKavachYojana

3.BSLIBimaSuraksha Super

NRI Solutions

1.BSLI Vision

2.BSLI Platinum Advantage Plan

Group Solutions

1.Gratuity: Group Value Plus Plan, Group Unit Linked Plan, and Guaranteed

Interest Credit

2.Leave Encashment: Group Unit Linked Plan, Group Value Plus Plan, and

Guaranteed Interest Credit

3.Affinity: Credit-Guard Mortgage Plans, and Group Asset Assure

4.Employer Employee: Employees Deposit Linked Insurance Scheme, and

Employer Term Insurance.

Protection solutions:



Secure your family’s future in this increasingly uncertain world and don’t leave

their dream to fate.

BSLI Protector Plus Plan

A plan that assures financial security for your family while keeping pace with

your growing needs, and rewards you for a healthy lifestyle.

BSLI Future Guard Plan provides complete financial freedom even when

respondents are not around, so that their loved ones live comfortably.

BSLI Easy Protect Plan

Respondent’s life responsibilities might either be escalating or have been

steady. Protect their family against the extra liabilities of life by choosing the

plan option best suitable for their needs.

2.1.20 ORGANIZATIONAL CHART (OR) STRUCTURE:

BOARD OF DIRECTORS

Mr. Kumar M Birla

Mr. Donald A Stewart,

Mr. Bishwanath N Puranmalka

Mr. Ajay Srinivasan

Mr. Gary M Comerford

Mr. Suresh N Talwar

Mr. Gian P Gupta

His Highness Maharaja G Singh



Mr. Stephan Rajotte

Dr. Bharat K Singh

INVESTMENT COMMITTEE

Mr. B. N. Puranmalka

Mr. Eugene Lundrigan

Mr. Ajay Srinivasan

Mr. Vikram Mehmi

Mr. Mayank Bathwal

Mr. Fabien Jeudy

Mr. Vikram Kotak

Chief executive officer- Mr. Pankaj Razdan is the MD & Chief Executive

Officer at Birla Sun Life Insurance (BSLI). He has rich experience in the

financial services business, across various functions and multiple lines of

business. He has been with the Aditya Birla Financial Services Group (ABFSG)

since 2007, as a co-owner of the ABFSG Vision and the Deputy Chief

Executive – Financial Services, a position he continues to hold. At ABFSG,

Pankaj has steered some of the key financial services verticals successfully

despite the challenging times.

Chief financial officer- Mr. Amit Jain is Chief Financial Officer (CFO) at Birla

Sun Life Insurance (BSLI) overseeing the Finance, Accounts and Taxation

functions.



Amit brings two decades of experience in finance, planning and strategy. He has

spent close to 10 years in BSLI. His sharp business acumen have lent immense

success to the planning and finance functions that he has spearheaded.

Mr. Vikas Seth is Chief Distribution Officer (CDO) at BSLI. He is a qualified

Electronics & Electrical Communication Engineer and has completed a Masters

Degree in Business Administration (Marketing). He joined BSLI in January

2008.

Chief design officer Currently at BSLI, Vikas is responsible for Direct Sales

Force, Bancassurance and Corporate Agency and Broker channels.

Vikas has a strong professional experience of over 17 years in diverse industries

including Telecom, FMCG and Life Insurance. He has worked with

organizations like Essar Telecom (Vodafone), Amway, ICICI Prudential and

HDFC Life in the past. His expertise is in start-up, building distribution,

implementation of sales & marketing strategies. He has played an important role

in building BSLI's distribution capabilities.

Head of sales- A sales manager plays a key role in the success and failure of an

organization. He is the one who plays a pivotal role in achieving the sales

targets and eventually generates revenue for the organization.

Branch heads:

Direct all operational aspects including distribution operations, customer

service, human resources, administration and sales

Assess local market conditions and identify current and prospective sales

opportunities

Develop forecasts, financial objectives and business plans

Meet goals and metrics

Manage budget and allocate funds appropriately



Bring out the best of branch’s personnel by providing training, coaching,

development and motivation

Locate areas of improvement and propose corrective actions that meet

challenges and leverage growth opportunities

Address customer and employee satisfaction issues promptly.

Senior Agency manager:

To recruit team of Insurance Advisors as per the corporate strategy

To ensure and maintain levels of productivity as prescribed

To focus on and develop various business segments as per the sales

strategy

To train IAs with the help of training team

To uphold the brand image and ensure compliance with all internal as

well as external regulations.

Zonal manager-

Handling a team of more than 50 responsible for the effective

functioning of branches

Branch administration, distribution, channel management in multi

channel environment,

Dealer and distributor management, local marketing activities

Directly responsible to deliver sales growth as per the organization’s

objectives

Handle large turnover and therefore commercial skills and business

acumen of high level is required.

Business development manager:



Identifies trendsetter ideas by researching industry and related events,

publications, and announcements; tracking individual contributors and

their accomplishments.

Locates or proposes potential business deals by contacting potential

partners; discovering and exploring opportunities.

Screens potential business deals by analyzing market strategies, deal

requirements, potential, and financials; evaluating options; resolving

internal priorities; recommending equity investments.

Develops negotiating strategies and positions by studying integration of

new venture with company strategies and operations; examining risks

and potentials; estimating partners' needs and goals.

Insurance advisors:

Develops base for long-term sources of clients by using referrals,

occupational, and special-interest groups to compile lists of prospects.

Approaches potential clients by utilizing mailings and phone solicitation;

making presentations to groups at company-sponsored gatherings;

speaking publicly to community groups on the subject of financial well-

being.

Determines clients' particular needs and financial situations by

scheduling fact-finding appointments; determining extent of present

coverage and investments; ascertaining long-term goals.

Developes a coordinated protection plan by calculating and quoting rates

for immediate coverage action and long-term strategy implementation.

Obtains underwriting approval by completing application for coverage.

Completes coverage by delivering policy; planning future follow-up

visits and evaluations of needs.

MANAGEMENT TEAM



Mr. Vikram Mehmi Mr. Mayank Bathwal

President & Chief Chief Financial Officer

Executive Officer

Mr. Mario Braganza Mr. E.N. Goveia

Chief Operating Officer Head - Direct Sales Force

Mr. Amit Punchhi Mr. Bhavesh Sanghvi

Senior Vice President Head - Group Life &

Third Party Distribution Pension

Mr. Snehal Shah Ms. Anjana Grewal

Senior Vice President - Senior Vice President –

Operations Marketing & Communications

Mr. Rajesh Bhojani Mr. K H Venkatachalam

Senior Vice President - Vice President - Human

DSF Expansion Resource

Mr. Fabien Jeudy Mr. Lalit Vermani

Vice President, Chief & Vice President –

Appointed Actuary Compliance

Mr. Melvyn D'souza Mr. Vikram Kotak

Vice President - Risk Vice President –

Management and Investments Internal Audit



Mr. Bhalachandra Nayak

Vice President – Strategy

Organizational Structure

C.E.O (Chief executive officer)

C.F.O (Chief financial officer)

C.D.O (Chief design officer)

H.O.S (Head of sales)

Z.M (Zonal manager)

R.M (Regional manager)

T.M.S (Territory manager)

B.H (Branch heads)

B.D.M/B.P (Business development manager/Business partners)

S.A.M (Senior agency manager)



A.M (Agency Manager)

A.A.M (Assistant agency manager)

I.A (Insurance Advisor)

Fig: organisational structure of Birla Sun Life Insurance

2.1.21 SWOT Analysis



.SWOT Analysis Of Birla Sunlife Insurance

Strength

Has Network of 600 branches and advisors spread over 1500 towns in

India having over 130,000 advisors

Backed By Aditya Birla Brand and Sun Life financial services

Emphasis on Customer Satisfaction through Transparent Functioning

Strong Capital Base.

Multi-channel distribution and one of the largest distribution networks in

India.

Implementing Six-Sigma process.



Customer centric products and services.

Superior investment and risk management framework

1 Million Policies sold within 3 and half years.

Company has maximum number of MDRT as well as good number of

HNI

advisors.

Training process of the company is very strong.

Different plan for different peoples.

According to the change in surrounding environment like changes in

customer requirement.

Weakness

1. Low Presence in Rural Market

2. Lesser advertising as compared to competitors

➢COMPANY does not penetrate on the rural market at a time.

➢There is no plan for the low income group.

➢Fees for the advisor is high than the other company.

Opportunities

1.Growing potential in the Rural Market

2. Alignment with Government Schemes

3. Better awareness amongst people for getting insurance

Insurance market is very big, where company can expand its

horizon in insurance industry

Though good investment and insurance it is easy to top Indian

customers.

➢The huge insurance market (77%) is left so company has opportunity to

expand our products.



➢To associate with the more number of HNI.

Threats1.Economic crisis and economic instability

2. Entry of new NBFCs in the sector

OLD HABITS DIE HARD’: It’s still difficult task to win the

confidence of public towards private company.

➢The company is facing major threats from LIC-which is an only

government company.

Plans for all income groups are not available which can create

adverse effect later on the market share of the company.



Chapter 3

3.1 Research methodology

Research methodology is a strategy that guides a research in providing

answers to research questions and for this, research survey is being done.

“Accuracy of the study depends on the systematic application of the



method”. The researcher has to decide the method to be used that helps

him to get a desired direction in a systematic way. Research means a

search for knowledge or gain some new knowledge and methodology can

properly refer to the theoretical analysis of the methods appropriate to a

field of study or to the body of methods and principles particular to a

branch of knowledge.

Research Design

A research design is a framework or blueprint for conducting the

marketing research project. It specifies the details of the procedures

necessary for obtaining the information needed to structure and/or solve

marketing research problem. Conclusive research is designed to assist the

decision maker in determining evaluating and selecting the best course of

action to take in a given situation being the study descriptive in nature, it

will go through theoretical data collection, and its analysis of a survey

questionnaire. A research design is the arrangement of conditions for the

collections and analysis of data in a manner that aims to combine

relevance to research purpose with economy in procedure.

In this research I have used descriptive design for research.

Sample Unit The sample unit pertaining to the study is 100 respondents of

Bangalore region

Research Sampling Technique: convenient sampling

Research Sample Size: 100 respondents



Target Sample Choice: people who have bought insurance and people who are

keen on buying insurance.

3.2 Methods of data collection

Data collection

The word data means any raw information, which is either quantitative or

qualitative in nature, which is of practical or theoretical use. The task of

data collection begins after a research problem has been defined and

research design chalked out. While deciding about the method of data

collection, the researcher should keep in mind that there are two types of

data primary and secondary.

Primary data

This is those, which are collected afresh and for the first Time, and thus

happen to be original in character. There are many ways of data

collection of primary data like observation method, interview method,

through schedules, pantry Reports, distributors audit, consumer panel etc.

The Team Managers and employees of both the Department were

consulted to get information about procedure of both the online and off

line share trading. But the method used by us for the primary data

collection was through questionnaires.

Questionnaire method

For the collection of primary data I used questionnaire method. A formal

list of questions, which are to be asked, is prepared in a questionnaire and

questions are asked on those bases. There are some merits and demerits

of this method. These as under: -



1. Low cost even when universe is large.

2. It is free from bias of interviewer.

3. Respondents have proper time to answer.

4. Respondents who are not easily approachable can also be reachable.

5. Large samples can be made.

Secondary data

These are those data, which are not collected afresh and are used earlier

also and thus they cannot be considered as original in character. There are

many ways of data collection of secondary data like publications of the

state and central government, reports prepared by researchers, reports of

various associations connected with business, Industries, banks etc. And

the method, which was used by us, was with the help of reports of the

company.

3.3 Sampling design

Here I’ve chosen convenient sampling design.

It is a statistical method of drawing representative data by selecting people

because of the ease of their volunteering or selecting units because of their

availability or easy access. The advantages of this type of sampling are the

availability and the quickness with which data can be gathered. The

disadvantages are the risk that the sample might not represent the population as

a whole, and it might be biased by volunteers.

3.4 Statement of problem



Since too many competitors already existing in the insurance sector, it is

difficult to attract customers to buy insurance. This study is taken to understand

the impact of the advertisement towards the customers.

3.5 Research objectives

To know the awareness of Insurance policies and Insurance Companies.

To understand the Consumer Buyer Behaviour for Insurance Policies.

To understand the role of advertisements in creating awareness To understand the impact of advertising on the sales. To conclude on the effect of advertising on sales

3.6 Plan of analysis

Initially a questionnaire was prepared .the sample size which I chose was of 100

respondents. The responses were collected through the questionnaire using

Google forms .After the responses were obtained a table was being made to

analyse the data. The responses of each individual was taken into consideration.

Looking from the responses obtained a pie chart was being made through which

the percentage ratios for the questions asked was determined…ie it showed

what percentage of people opt for Birla SunLife insurance products etc.



Chapter 4

Analysis & Interpretation

4.1Annual income of family



2 - 4 lacs

4-6 lacs

6 & above

Analysis and interpretation

The objective of this question was knowing the annual income of the family.In

the survey conducted among 100respondents, it was found that 42.9% of them

were in the annual income group of 6 Lakhs & Above category,29.7% were in

4 lakhs – 6 lakhs category,27.5% of them were in 2 lakhs -4 lakhs category.


Annual income Number of

respondent

s

Total

percentage

2 lakhs – 4 lakhs 25 27.5%

4 lakhs – 6 lakhs 27 29.7%

6 lakhs and above 39 42.2%


4.2 Occupation

Occupation Number of

respondents

Total percentage

Government employee 13 13.7%

Private employee 29 30.5%

Businessmen 20 21.1%

Others 33 34.7%

Govt. Empyprivt empybusinessothers


The objective of this question is to know the occupation of

respondents .By conducting a survey with sample size as 100 it was

found that 13.7% of the respondents were working under government

sector as employees,30.5% of them were working in an private

companies,21.1% of them were sole businessmen and the remaining

34.7% constituted other category i.e. students, retired officers and home

makers.



4.3 To know if respondents had seen advertisements on insurance

People who have seen

insurance

advertisements

Number of

respondents

Total percentage

Yes 95 96.9%

No 5 3%

Total 100 100%

Yes2nd Qtr


The objective of this question was to find out how many of them have

seen insurance advertisement. By conducting a survey on 100

respondents it was found that 96.9%of the respondents already have seen

insurance advertisements and 3% of them have not seen insurance

advertisements..

4.4 Awareness of insurance sector



Media vehicle from

you became aware of

insurance sector

Number of

respondents

Total percentage

Television 53 54.1%

Newspaper 17 17.3%

Social Media 17 17.3%

Radio 10 10.2%

Others 1 1%

televisionnewspapersocial mediaradioothers


The objective of this question was to find out number of respondents

who became aware of insurance sector through which media vehicle.

By conducting a survey among 100 respondents it was found that

54.1% of them get aware from television, 17.3% of them from

newspaper, again 17.3% of them from social media, 10.2% of them

from radio and 1% of them from other.

4.5 Respondents who can recall advertisements of insurance sector



People who can recall

advertisement of

insurance company

Number of

respondents

Total percentage

Yes 78 79.6%

No 20 20.4%

YesNo



who can recall the advertisement of insurance company. By

conducting a survey among 100 respondents it was found that 79.6%

of them can recall the advertisement of insurance company and 20.4%

of them are not able to recall.

4.6 Impression of advertisement of insurance company

Impression of Number of Total percentage



advertisement of any

insurance company

respondents

Yes 66 67.3%

No 32 32.7%

Yes2nd Qtr



who had a lasting impression of advertisement of insurance into their

minds .By conducting a survey among 100 respondents it was found

that 67.3% of them had a lasting impression about the advertisement

they saw and 32.7% of them couldn’t recall any advertisement.

4.7 Awareness of Birla Sunlife Insurance

People who heard

about Birla Sunlife

Number of Total percentage



Insurance respondents

Yes 92 95.8%

No 4 4.2%

YesNo


The objective of this question was to find out how many of the

respondents are aware about Birla Sunlife Insurance. It was found

from the survey conducted among 100 respondents that 95.8% of the

respondents are aware about Birla Sunlife Insurance and 4.2% of

them are not.

4.8 If yes, sources

Source of knowing

Birla Sunlife Insurance

Number of

respondents

Total percentage

Television ad 35 35.7%

Newspaper/Magazine 13 13.3%



Internet/Social media 23 23.5%

Personal Email/SMS 1 1%

Word of mouth 13 13.3%

From BSLI Salespersons 10 10.2%

Others 3 3.1%

Television adNewspaperInternetPersonalWordbsli sales


The objective of this question was to find out how many of the respondents are

aware about Birla Sunlife Insurance through various channels . It was found

from the survey conducted among 100 respondents that 35.7% of the

respondents are aware about Birla Sunlife Insurance through television, 13.3%

of them are from newspaper/magazine, 23.5% of them from internet/social

media, 1% personal email/SMS, 13.3% word of mouth, 10% Birla Sunlife

Insurance Salespersons and 3% are of them from others.

4.9 Planning of taking insurance policy in near future



People who are planning to take insurance

in near future

Number of

respondent

s

Total

percentage

Yes 70 71.4%

No 28 28.6%

YesNo


The objective of this question was to find out how many of the respondents are

planning to take insurance in near future. It was found from the survey

conducted among 100 respondents that 71.4% are planning to take insurance

policy in near future and 28.4% are of them not.

4.10 If yes, companies

Options of insurance companies Number of

respondent

s

Total

percentage



Birla Sunlife Insurance 25 29.8%

LIC 23 27.4%

SBI Life Insurance 13 15.5%

HDFC Life Insurance 7 8.3%

ICICI Prudential 8 9.5%

Others 8 9.5%

BsliLICSBI HDFCICICIothers


The objective of this question was to find out the respondents opinion of which

insurance company would they prefer in future. It was found from the survey

that 29.8% of the total respondents would prefer Birla Sunlife Insurance as their

prefer brand, 27.4% of them are prefer LIC, 15.5% prefer SBI life insurance,

8.3% of them prefer HDFC life insurance, 9.5% prefer ICICI prudential and

9.5% of them prefer others.

4.11 Reasons behind taking an insurance policy



Reasons behind

taking an insurance

policy

Number of

respondents

Total percentage

Safety & Security 43 46.2%

Mode of investment 17 18.3%

Tax planning 14 15.1%

ROI & additional

benefits

13 14%

Others 6 6.5%

SafetyMode of investTax planningROIOthers


The objective of this question was to find out the reasons behind taking

insurance policy by the respondents. It was known from the survey conducted

on 100 respondents that 46.2% of the respondents wants to take insurance

because of safety and security, 18.3% of them because of mode of investment,



15.1% because of tax planning, 14% because of ROI & additional benefits and

6% because of others.

4.12Purchase of policy Driven by

Purchase of policy driven by Number of

respondent

s

Total

percentage

Self driven/Safety purpose 38 41.3%

Family & Friends 32 34.8%

Expert opinion 16 17.4%

Users review by advertising media 6 6.5%

Self drivenFamily & friendsExpert opininoUsers review




The objective of this question was to find out the driving force behind

the purchase policy. It was known from the survey conducted on 100

respondents that 41.3% of them are self driven, 34.8% of the respondent’s

purchase decision are driven by family & friends, 17.4% of the respondent’s

purchase decision are driven by expert opinion and 6.5% of the respondent’s

purchase decision are driven by others.

4.13 To know if respondents had heard of Birla Sun life Insurance

product

Product of Birla Sunlife Insurance you

heard of

Number of

respondent

s

Total

percentage

Income Insurance 14 14.3%

Money back 14 14.3%

Term insurance 16 16.3%

Life insurance 22 22.4%

Wealth insurance 9 9.2%

Child insurance 13 13.3%

No responses 10 10.2%



Incomemoney backTermLifeWealthChildNo response


The objective of this question was to find out the respondents aware of Birla

Sun Life Insurance products. It was found from the survey conducted that

100% of the respondents were aware of it, 14.3% of the total respondents were

aware of income insurance, 14.3% of them were aware of money back, 16.3%

of them were aware of term insurance, 22.4% of them were aware of life

insurance, 9.2% of them were aware of wealth insurance, 13.3% of them were

aware of child insurance and 10.2% of them gave no response.

4.14 To know if respondents were aware of unique features and benefit of

Birla Sun life insurance



Unique features and

benefits of Birla

Sunlife Insurance

Number of

respondents

Total percentage

Tax reduction 33 35.5%

Guaranteed annual

payout

9 9.7%

Endowment or money

back

9 9.7%

Flexible payout option 13 14%

Premium payment

option

16 17.2%

Money back option 13 14%

TaxGuranteedEndowmentFlexiblePremiumMoney


The objective of this question was to find out to know the respondents opinion

on unique features and benefits of Birla Sunlife Insurance. On a survey



conducted on 100 respondents it was found that 35.5% of the respondents know

about tax reduction, 9.7% of them know about guaranteed annual payout, 9.7%

of them know about endowment or money back, 14% of them know about

flexible payout option, 17.2% of them know about premium payment option

and 14% of them know about money back option.

4.15 To know if respondent’s company provide insurance

Does your company

provide insurance

Number of

respondents

Total percentage

Yes 75 80.2%

No 23 18%

YesNo




The objective of this question was to find out to know weather the company

provides insurance to the respondents or not. On a survey conducted on 100

respondents it was found that 80.2% of the respondents get insurance from

company and 18% of them are not getting insurance.

4.16 To know if advertising effect on buying behaviour of insurance

products

Does advertising

effect on buying

behaviour of

insurance product

Number of

respondents

Total percentage

Yes 68 70.8%

No 28 29.2%

YesNo




The objective of this question was to find out to know does

advertising effect on buying behaviour of any insurance products. On

a survey conducted on 100 respondents it was found that 70.8% of

the respondents effected by the advertisement of insurance products

and 29.2% of them are not.

4.17Which mode of advertisement attracts you most?

Advertisements mode attracts you most

Number of respondents Total percentage

Newspaper 14 14.3%

Television 45 45.9%

Magazine 4 4.1%

Online advertisement 19 19.4%

Hoardings 13 13.3%

Others 3 3.1%

NewspaperTelevisionMagazineOnline advertHoardingsOthers




The objective of this question was to find out which advertisement mode

attracts the respondents most. The survey conducted on 100 respondents

showed that 14.3% of the total respondents are attracted by newspapers, 45.9%

of them are attracted by television, 4.1% of them are by magazine, 19.4% of

them are by online advertisements, 13.3% are by hoardings and 3.1% are by

others.

4.18 Mode of advertisement which attracts mnost

Number of

respondents

Total percentage

Animation 11 11.2%

Originality 31 31.6%

Humour 21 21.4%

Music 4 4.1%

Storyline/Concept 20 20.4%

Celebrity endorsement 11 11.2%

AnimationOriginalityHumourMusicStorylineCelebrity




The objective of this question was knowing the attraction towards types of

advertisements of respondents. In the survey conducted among 100respondents,

it was found that 11.2% of them are attracted towards animation, 31.6% of them

are by originality, 21.4% are by humour, 4% by music, 20.4% are by storyline

and 11.2% are by celebrity endorsement.

4.19 To know from which way respondents wants to know about the

insurance

Mode from which

respondents want

information about

insurance

Number of

respondents

Total percentage

Print Ad 13 13.3%

Magazine Ad 5 5.1%

Hoardings 14 14.3%

Television Ad 36 36.7%

Web Ad 20 20.4%%

Agents 10 10.2%



Print adMagazine adHoardingsTelevisionWeb adAgents


The objective of this question was knowing that through which medium the

respondents want to receive information related to insurance .In the survey

conducted among 100 respondents, it was found that 13.3% of them want to

receive information through print ad, 5.1% of them are from magazine ad,

14.3% of them are by hoardings, 36.7% of them are by television ad, 20.4% of

them are by web ad and 10.2% of them are by agents.



4.20 To know how many times respondents had seen advertisements of

Birla Sunlife Insurance

Advertisement of Birla Sunlife seen by

respondents in a week

Number of

respondent

s

Total

percentage

0 25 25.5%

1 – 3 61 62.2%

4 – 7 9 9.2%

More than 7 3 3.1%

01 to 34 to 7more than 7


The objective of this question was knowing how many respondents

have seen Birla Sunlife advertisement in a week. In the survey

conducted among 100 respondents, it was found that 25.5% of them

didn’t see any advertisement in one week of time, 62.2% of them saw

the advertisement 1 to 3 times in a week, 9.2% of them saw the



advertisement 4 to 7 times in a week and 3.1% of them saw the

advertisement more than 7 times in a week.

4.21 To know how respondents describe the advertisement of Birla

Sunlife Insurance

Describe the

advertisement of Birla

Sunlife Insurance

Number of

respondents

Total percentage

Convincing 29 34.1%

Just for the purpose of

sale

13 15.3%

Building relationship

between company &

consumer

23 27.1%

Satisfying your needs 20 23.5%



ConvincingJust for the saleBuilding relationshipSatisfying you needs


The objective of this question was knowing the impact of Birla Sunlife

Insurance advertisement on respondents mind. In the survey conducted

among 100 respondents, it was found that 34.1% of them were convinced

by the advertisement, 15.3% of them said that its just for the purpose of

sale, 27.1% of them are thought of building relationship between

company and consumer and 23.5% respondents thought of satisfying you

needs.

4.22 Need of more advertisements of Birla Sunlife Insurance

Need of nore

advertisement of

Birla Sunlife

insurance

Number of

respondents

Total percentage

Yes 73 74.8%

No 27 25.2%



YesNo


The objective of this question is to know weather there is a need for more

advertisement of Birla Sunlife Insurance .By conducting a survey with

sample size as 100 it was found that 74.8% of the respondents wants to

see more advertisement and 25.2% are not.



Chapter 5Findings, Recommendation and conclusion



5.1 Findings

1. During the study it was found that annual income of the family who buys an insurance would fall in the range of 6 lakhs and above.

2. The survey conducted on 100 respondents showed that 96.9% i.e. 95 respondents had already seen an insurance advertisement.

3. Out of the 100 respondents, 53 of them had seen an insurance advertisement through television which constituted 54.1% of the overall response, whereas 17.3% of them through newspaper, again 17.3% of them through social media, 10.2% through radio and 1% of them through others.

4. The survey showed that 79.6% of the respondents can recall the context of advertisement of insurance company and 20.4% are not able to recall.

5. The study showed that 67.3% of the respondents agree that advertisement of insurance company leaves a lasting impression on mind and 32.7% are not agree with this.

6. The survey conducted among 100 respondents showed that 95.8% of them are aware of Birla Sunlife Insurance and 4% are not.

7. The survey showed that 35.7% of the respondents were aware of Birla Sun Life Insurance through television ad, 13.3% of them through



newspaper/magazine, 23.5% of them through internet/social media, 1% through personal email/SMS, 13.3% through word of mouth, 10.2% are from Birla Sunlife Insurance salespersons and 3.1% are from agents.

8. The study showed that only 71.4% of the respondents wants to invest in insurance sector in near future and 28.6% are not ready to invest.

9. The survey showed that 29.8% of the respondents want to invest in Birla Sunlife Insurance, 27.4% are in LIC, 15.5% are in SBI life insurance, 8.3% are in HDFC life insurance, 9.5% are in ICICI prudential and 9.5% are in others.

10.The survey showed that 46.2% of the respondents wants to take insurance because of safety and security, 18.3% of them because of mode of investment, 15.1% because of tax planning, 14% because of ROI and additional benefits and 6.5% because of other reasons.

11.The study showed that 41.3% of the respondent’s purchase decision of insurance products are driven by themselves, 34.8% because of family and friends, 17.4% because of expert opinion and 6.5% because of users review by advertising media.

12.The survey showed that 14.3% of the respondents know about the income insurance of Birla Sunlife Insurance, again 14.3% are aware about money back, 16.3% know about term insurance, 22.4% know about life insurance, 9.2% know about wealth insurance, 13.3% know about child insurance and 10.2% are not aware of any products of Birla Sunlife insurance.

13.The survey showed that 35.5% of the respondents were aware of tax reduction benefits of Birla Sun Life Insurance, 9.7% are guaranteed annual payout, again 9.7% are endowment or money back, 14% are flexible payout option, 17.2% are premium payment option and 14% are money back option.

14.The study showed that 78.3% of the respondents have their insurance policy by their existing company and 21.7% have not.

15.The study showed that 14.3% of the respondents are attracted by newspaper advertisement, 45.9% television ad, 4.1% magazine ad, 19.4% online ad, 13.3% hoardings and 3.1% others.

16.The survey showed that 11.2% of respondents like animation type of advertisements, 31.6% like originality, 21.4% like humour, 4.1% like music, 20.4% like storyline/concept and 11.2% like celebrity endorsement.



17.The survey showed that 13.3% of respondents wants to receive information related to insurance through print ad, 5.1% through magazine ad, 14.3% from hoardings, 36.7% from television ad, 20.4% from web ad and 10.2% are from agents.

18.The survey showed that 25.5% of respondents didn’t see any advertisement in one week of time, 62.2% saw 1 to 3 times in a week, 9.2% saw 4 to 7 times and 3.1% saw more than 7 times in a week.

19.The survey showed that 74.8% of respondents wants to see more advertisement of Birla Sunlife Insurance and 25.2% don’t want to see.

20.The survey showed that 70.8% of respondents feel that advertisement has positive impact on buying behaviour of insurance products and 29.2% are not feel the same.

5.2 Recommendations

1. Company should target each and every class of the society.2. More number of promotional activities have to be done to make

customers attract towards buying an insurance 3. Company should provide full information to the customers before

targeting so they can take interest in buying an policy.4. There should be an policy for the lower income group.5. Parking facility should be made available for the visitors vehicle at the

Birla Sun Life Insurance office at Indira Nagar branch, Bangalore.6. The company should find out the no. of people who are not having any

of the insurance plans through an intensive market research and motivate them to get insured.

7. Company should also focus on customer relationship management to improve customer satisfaction level.

5.3 ConclusionThe threat of new players taking over the market has been overplayed. As is witnessed in other countries where liberalization took place in recent years we can safely conclude that nationalized players will



continue to hold strong market share positions, but there will be enough business for new entrants to be profitable. Potential buyers for most of this insurance lie in the middle class. New insurers must segment the market carefully to arrive at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized insurers have already begun to target niches like pensions, women or children. Substantial shift in the distribution of insurance in India is likely to take place. Many of these changes will echo international trends. Worldwide, insurance products move along a continuum from pure service products to pure commodity products. Initially, insurance is seen as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and place a high premium on brand names and reliability.

References

1. www.indianmirror.com/indian-industries/2016/insurance- 2016.html

2. www.infoboutinsurance.blogspot.in/2009/06/insurance-global- scenario.html

3. www.ibef.org/insurance 4. www.ey.com/IN/en/Industries/Financial-services/Insurance/

Indian-insurance-sector.5. www.adityabirla.com/business/profile/birla-sun-life-insurance-

co-ltd.6. https://insurance.bslife.com/document/annualreport.pdf 7. https://storify.com/rheajind/india-s.gdp-and-contribution-of-the-

insurance-sect8. https://iosrjournals.org/iosr-jbm/papers/vol7-issue4


https://iosrjournals.org/iosr-jbm/papers/vol7-issue4

https://storify.com/rheajind/india-s.gdp-and-contribution-of-the-insurance-sect

https://storify.com/rheajind/india-s.gdp-and-contribution-of-the-insurance-sect

https://insurance.bslife.com/document/annualreport.pdf

http://www.ey.com/IN/en/Industries/Financial-services/Insurance/Indian-insurance-sector

http://www.ey.com/IN/en/Industries/Financial-services/Insurance/Indian-insurance-sector

http://www.ibef.org/insurance

http://www.infoboutinsurance.blogspot.in/2009/06/insurance-global-scenario.html

http://www.infoboutinsurance.blogspot.in/2009/06/insurance-global-scenario.html

http://www.indianmirror.com/indian-industries/2016/insurance-2016.html

http://www.indianmirror.com/indian-industries/2016/insurance-2016.html


Appendices

A study on how advertisements help in changing the perception of consumers in the Insurance sector.

1. Name :

2. Age :

3. Gender :

4. Income : a) 200000-400000 []

b) 400000-600000 []

c) 600000 and Above []

5. Occupation : a) Govt. Employee []

b) Private Employee []

c) Business Man []

d) Others []



6. Which media mostly you used to get the information about the Insurance?

a) TV []

b) Newspaper []

c) Social Media (Internet) []

d) Radio []

e) Others []

7. Have you seen any insurance Advertisement?

a) Yes []

b) No []

8. At which channel you saw Insurance Advertisement?

a) News []

b) Music []

c) Movie []

d) Sports []

e) News Paper & Magazine []

f) Agent []

g) Others []

9. Can you recall the context of Advertisement of Insurance Company?

a) Yes []

b) No []

10. Does the Advertisement of any product of any Insurance company leaves a lasting

on your mind regarding the brand?



a) Yes []

b) No []

11. Have you ever heard about the company Birla Sun life insurance in the insurance

sector?

a) Yes []

b) No []

12. If yes, then mention the source from where you have heard?

a) TV Ad []

b) Newspaper/Magazine []

c) Internet/ Social Media []

d) Personal E-mail/ SMS []

e) Word of mouth []

f) From Birla Sun life salesperson []

g) Others []

13. Do you plan to invest in any insurance policy in the near future?

a) Yes []

b) No []

14. If yes what options do you have in your mind?

a) Birla Sun Life Insurance []

b) LIC []

c) SBI LIFE INSURANCE []

d) HDFC Life INSURANCE []



e) ICICI PRUDENTIAL []

f) Others []

15. Reasons behind taking an insurance policy?

a) Safety and Security []

b) Mode of Investment []

c) Tax Planning []

d) ROI & Additional Benefits on purchase of Insurance []

e) Others (Please Specify) []

16. Purchase of policy Driven by:

a) Self-Driven/ Safety Purpose []

b) Family and friends []

c) Expert Opinion []

d) Users Review by Advertising Media []

17. Which of the following Birla Sun life Insurance product have you heard of?

a) Income insurance []

b) Money Back []

c) Term Insurance []

d) Life Insurance []

e) Wealth insurance []

f) Child Insurance []

g) No response []



18. Do you know any of the following unique features and benefit of Birla Sun life

insurance?

a) Tax reduction []

b) Guaranteed annual payout []

c) Endowment or money back []

d) Flexible payout option []

e) Premium payment option []

f) Money Back option []

19. If you are not interested to buy Birla Sun life insurance policy, can you please

write the reason?

20. Does your company provide you with insurance?

a) Yes []

b) No []

21. Which mode of advertisement attracts you most?

a) Newspaper []

b) Television []

c) Magazine []

d) Online Advertisements []

e) Hoardings/posters []

f) Others []

22. Which type of advertisement attracts you most?

a) Animation []



b) Originality []

c) Humour []

d) Music []

e) Storyline / concept []

f) Celebrity endorsement []

23. In which way do you want to receive information related to Insurance?

a) Print Ad []

b) Magazine Ad []

c) Hoardings []

d) TV Ad []

e) Web Ad []

f) Agents []

24. How often do you see Birla Sun life Insurance advertisement in Television in last

week?

a) 0 []

b) 1-3 []

c) 4-7 []

d) More than 7

25. How did you describe the advertisement? (If you have seen any advertisement of

Birla Sun Life insurance, then only answer this question)

a) Convincing []

b) Just for the purpose of sale []



c) Building relationship between company & consumer[]

d) Satisfying your needs []

26. Do you feel you need to see more advertisements to know about the products of

Birla Sun life Insurance?

a) Yes []

b) No []

27. Does Advertising makes any difference on buying behavior for any type of

Insurance Product?

a) Yes Please (Specify) []

b) No []


Documents

Ujjwal final sip