Final Project Report
On
Market Research
For
“RELIANCE LIFE INSURANCE”
Guided By: Mr.Surendra singh vaghala
Submitted By:
Mihir H. shahRoll no.520910127
In partial fulfillment of the requirement for the award the degree
Of
MBA 4th Sem. , Marketing
July 2011
[Type text] Page 1
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
PREFACE
Life Insurance Corporation is walking up to the challenges thrown in
by market economy. To survive in this highly competitive scenario,
the students who are the future manager to work hard in their
education and education is incomplete without “practical studies”
practical studies as a basic discipline is taught to management
students to facilitate our understanding of the foundation of the
functional areas of management with specific reference to industry
study.
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
ACKNOWLEDGEMENT
The present work is an effort to throw some light on Marketing
Strategy of LIC at “Life Insurance Corporation ”. The work would not
have been possible to come to the present shape without the able
guidance, supervision and help to me by number of people.
With deep sense of gratitude I acknowledge the encouragement and
guidance received by my organizational guide Surendra singh
Vaghela and other staff members.
I convey my heartful affection to all those people who helped and
supported me during the course, for completion of my Project Report.
Date:
Place: (Mihir H. Shah)
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
Table of content
Topic No. Chapter Page No.1. Introduction
1.1 insurance
1.2 type of insurance
1.3 history of insurance
1.4 global scenario of the insurance industry
1.5 indian scenario
1.6 contribution of Indian economy
1.7 government policies
6
6
11
12
17
20
27
28
2. Organizational overview
2.1 what is ADAG ?
2.2 companies under ADAG?
2.3 relience life insurance co.ltd
2.4 explanation
33
33
38
42
52
3. Research problem
3.1 Research problem
3.2 research methodology
64
64
64
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
3.3 sample size
3.4 sampling technique
3.5 research findings
65
65
65
4. Data analysis & interpretation 75
5. conclusion 99
6. Questionnaire
Bibliography
105
108
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
CHAPTER 1 INTRODUCTION:
“The Business of Insurance is related to the protection of the
economic values of the assets”.
Every human being has the tendency to save to protect him from
risks or events of future. Insurance is one form of savings where in
people try to assure themselves against risks or uncertainties of
future. It is assurance against risks or events or losses.
People can save their earnings either in the form gold, fixed assets
like property or in banking and insurances. All the savings of people
of a country account for gross domestic savings. In India, although
savings rate is high but people prefer to invest either in gold or fixed
assets so that they can make money out of it. Hence insurance sector
is still untapped in India.
DEFINITION OF INSURANCE AND OVERVIEW OF CURRENT INSURANCE INDUSTRY
1.1 INSURANCE
1.1.1 WHAT IS INSURANCE?
Insurance is a tool by which fatalities of a small number
are compensated out of funds (premium payment) collected from
plenteous. Insurance is a safeguard against uncertain events that
may occur in the future.
It is an arrangement where the losses experienced by a few are
extended over several who are exposed to similar risks. It is a
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protection against financial loss arising on the happening of an
unexpected event. Insurance companies collect premium to provide
security for the purpose. Loss is paid out of the premium collected
from people and the insurance companies act as trustees to the
amount so collected. These companies have proposal forms which
are filled to give details of insurance required. Depending upon the
answers in the proposal form insurance companies assess the risk
and decide on the premium.
Insurance companies are risk bearers. They underwrite the risk in
return for an insurance premium. the function of insurance is to
provide protection, prevent losses, capital formation etc. hence
insurance can be defined as a tool in which a sum of money as a
premium is paid by the insured in consideration of the insurer’s
bearing the risk of paying a large sum .it may also be defined as a
contract wherein one party (insurer) agrees to pay the other party
(insured) or his beneficiary, a certain sum upon a given contingency
against which insurance is required.
Insurance industry commands massive funds through sales of
insurance products to large number of clients. Insurers also create
liabilities and commit themselves to compensate for losses occurring
to the policyholders on future date. It also plays an important role in
process of capital formation.
From the above discussion we can find out some of the important
characteristics of insurance which are as follows:
1. Pooling of losses
2. Payment of fortuitous losses
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
3. Risk transfer
4. indemnification
Pooling of losses:
Pooling or sharing of losses is the main characteristic of an insurance
industry. Pooling means to spread the losses incurred by a few over
the entire group, so that in the process, average loss is substituted for
the actual loss.
Payment of fortuitous losses:
A fortuitous loss is one that is unexpected and occurs as a result of
chance or in other words it means the loss must be accidental.
Risk transfer:
It means that a pure risk is transferred from the insured to the insurer,
who typically is in a stronger financial position to pay the loss than the
insured.
Here pure risk means a situation in which there are only the
possibilities of loss or no loss. For example premature death, job
related accidents, property destroyed by fire, flood, or earthquake.
Indemnification:
It means that the insured is restored to his or her approximate
financial position prior to the occurrence of the loss.
Thus in the most basic sense, insurance is compensating a person or
business for a loss.
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1.1.2 NATURE OF INSURANCE:
a) Risk sharing and risk transfer: insurance is used to share the
financial losses that might occur to an individual or his family on the
happening of specified events. The loss arising from such events are
shared by all the insured in the form of premium.
Example: suppose in a village, there are 250 houses, each valued at
Rs.200000.every year one house gets burnt, resulting into a total loss
of Rs 200000.if all the 250 owners come together and contribute
Rs.800 each, the common fund would be Rs200000.this is enough to
pay to the owner whose house gets burnt. Thus the risk of one owner
is spread over 250 house owners of the village.
b) Risk assessment in advance: insurance companies are risk
bearers. They assess the risk before insuring to charge the amount of
premium.
c) Its not gambling or charity: The uncertainty is changed to
certainty by insuring property and life because the insurer promises to
pay a definite sum at damage or death. Insurance is antithesis of
gambling. Failure of insurance amounts to gambling because the
uncertainty of loss is always looming. Moreover insurance is not
possible without premium. So it is different from charity because
charity is given without consideration.
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d) Huge number of insured people: It is essential to insure larger
number of people or property to make cost of insurance less
consequently premium would also be less.
e) Assists in capital formation: insurance provides capital to
society. Accumulative funds are invested in productive channels.
1.1.3 SEMANTICS:
1. Risk: it is defined as an uncertainty of a financial loss. It is the
unintentional decline in or disappearance of value arising from
contingency.
2. Policy: it is the document which embodies the insurance
contract
3. Whole life policy: it is the policy under which the amount of
policy will be paid only on death of the insured. Premiums may
be payable throughout the life or for a limited period.
4. Endowment policy: endowment policies entitle the insured to
receive the amount of the policy on his reaching a certain age
and premiums also stops. If death occurs earlier, amount of the
policy will be paid at that time and payment of premium will also
stop at that time.
5. Claim: it is the amount which an insurer has to pay against a
policy.
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6. Reinsurance: it refers to placing a part of the risk by an insurer
with another insurer. The object is to reduce the possible loss to
be borne by the original insurer, who pays premiums at the
ordinary rates to the reinsurer. Reinsure must pay commission
to the original insurer.
7. Premium: A periodic payment made on an insurance policy.
8. Insurance penetration: it is defined as insurance premium as
a share of gross domestic product.
9. Insurance density: insurance density is defined as per capita
expenditure on insurance premium i.e. premium per capita.
10. Actuary: the actuary is a specialist who combines an
understanding of risks and mathematical technique to develop
financial products to manage these risks, price these products.
He helps in designing insurance plans and then evaluates the
financial risk of the company which it takes while selling an
insurance policy.
1.2. TYPES OF INSURANCE:
Insurance is broadly divided in two segments, based on the nature of
insurance, those are:
1. Life Insurance &
2. Non-Life Insurance or General Insurance. It can be again
subdivided into the following categories:
a) Fire Insurance.
b) Marine Insurance.
c) Social Insurance &
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d) Miscellaneous Insurance. (Health insurance, Liability Insurance
etc….)
1.3. HISTORY OF INSURANCE:
1.3.1 GLOBAL:
For now we know the meaning of insurance, different types of
insurance. Now let us know the history and reasons for and behind
different types of insurance.
Insurance has existed for thousands of years. The first ever type of
insurance was Property Insurance. It became popular about 3000 BC
in China. It all started when Chinese merchants, as well as their
investors, wanted to ensure that they would see a profit from their
goods that they shipped overseas. In the event that a ship was lost at
sea, an insuring partner would reimburse the owners of the ship and
goods. To pay for the loss the merchant would be sold into slavery to
the insurer until the debt was repaid. This was so because, a
merchant could not afford to pay for the lost goods or even to buy a
ship unless someone invested.
Property insurance was also seen in Babylon as well. In Babylon,
merchants and investors entered into a contract, in which the supplier
of money for a trade agreed to cancel the loan if the trader was
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robbed of his goods. The trader who borrowed the money paid an
extra amount for this protection in addition to the usual interest. As for
the lender, collecting these premiums from many traders made it
possible for him to absorb the losses of the few. Later this contract
was extended to include provisions for a family's home and even the
death of the insured, where life insurance came into existence. Slowly
this concept started to spread across other places like Greek,
Roman.
Since ancient times, communities have pooled some of their
resources to help individuals who suffer loss. Like, about 3500 years
ago, Moses instructed the nation of Israel to contribute a portion of
their produce periodically for "the alien resident and the fatherless
boy and the widow."
Later the origin of credit insurance, which was included in the Code of
Hammurabi, a collection of Babylonian laws said to predate the Law
of Moses. Credit insurance means, in ancient times the ship owners
obtained loans from investors to finance their trading expeditions. In
case, if a ship was lost, the owners were not responsible to pay back
the loans to the investors. The risk to the lenders was covered by the
interest paid by numerous ship owners, since many ships returned
safely.
By the middle of the 14th century, marine insurance was one of the
most popular types of insurance among nations of Europe. Things
changed dramatically in the 17th century in Europe. In 1666, the
Great Fire of London bought the need for fire insurance .The Great
Fire of London burned for four days and nights. It destroyed 436
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acres, 13,200 houses, 89 churches (including Saint Paul's
Cathedral), the Custom House, the Royal Exchange and dozens of
other public buildings. Only six people were victims in the flames, but
hundreds died from shock and exposure.
By 1688, Edward Lloyd was running a coffeehouse in London.
Where, London merchants and bankers met informally to do
business. There financiers who offered insurance contracts to
seafarers wrote their names under the specific amount of risk that
they would accept in exchange for a certain payment, called
premium. These insurers came to be known as underwriters. Finally,
in 1769, Lloyd's became a formal group of underwriters that in time
grew as an insurance company.
The concept of insurance developed at a fast pace with the growth of
British commerce in the 17th and 18th century. The first stock
companies to engage in insurance were chartered in England in the
year 1720.
In 1735, the first insurance company in the American colonies was
founded at Charleston. Later in the year 1787, fire insurance
corporations were formed in New York. Then later in the year 1759,
the life insurance corporation was started in Philadelphia, America.
The New York fire which occurred in the year 1835 was the main
reason to draw attention to create reserves to meet unexpected
losses. In the year 1837, Massachusetts was the first state to require
companies by law to maintain such reserves. After 1840, life
insurance entered a boom period.
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The Workmen's Compensation Act of 1897 in Britain required
employers to insure their employees against industrial accidents.
Public liability insurance, fostered by legislation, made its appearance
in the 1880s.It attained major importance with the advent of the
automobile.
Until the 1950s, most insurance companies in the United States were
restricted to provide only one type of insurance, but then legislation
was passed to permit fire and casualty companies to underwrite
several classes of insurance. Many firms have since expanded and
also were responsible for many mergers.
From this brief accounting of history we can see how insurance came
into existence. Fortunately for us we no longer have to sell ourselves
into slavery if our car is stolen nor we have to be scared of losses due
to absence of reserves. However we can be confident that we will be
compensated for our loss. Without people wanting to secure their
investments and great tragedies throughout history we may not have
insurance as we know it today resulting in peace of mind.
1.3.2 HISTORY OF INSURANCE INDUSTRY IN INDIA
The insurance industry in India over the past century has gone
through big changes. In India this industry reveals the 360 degree
turn. 360 degree turn means that it started in India from being an
open competitive market to nationalization and back to a liberalized
market again.
Insurance industry in India started as a fully private system with no
restriction on foreign participation in the Nineteenth Century. Before
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independence, a few British insurance companies dominated the
Market. Life insurance was first set up in India through a British
company called the Oriental Life Insurance Company in 1818,
followed by the Bombay Assurance Company in 1823 and the
Madras Equitable Life Insurance Society in 1829.All of these
companies operated in India but did not insure the lives of Indians.
They were there insuring the lives of Europeans living in India. Some
of the companies that started later did provide insurance for Indians.
But, they were treated as "substandard" and therefore had to pay an
extra premium of 20% or more. The first company that had policies
that could be bought by Indians with "fair value" was the Bombay
Mutual Life Assurance Society starting in 1871.
The first general insurance company, Triton Insurance Company Ltd.,
was established in 1850. It was owned and operated by the British.
The first general insurance company was the Indian Mercantile
Insurance Company Limited set up in Bombay in 1907.By 1938; the
insurance market in India had nearly 176 companies (both life and
non-life).
After the independence, the industry went to the other extreme. It
became a state-owned monopoly. The industry started to witness a
problem like fraud. Hence many regulations were put in place to
reduce and control the problems in the industry. After which
Insurance was nationalized. In 1956, the then finance minister S. D.
Deshmukh announced nationalization of the life insurance business
and then the general insurance business was nationalized in 1972.
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Only in 1999 private insurance companies have been allowed back
into the business of insurance with a maximum of 26% of foreign
holding.
1.4. GLOBAL SCENARIO OF THE INSURANCE INDUSTRY
If we see the figures in terms of both the premium value and the total
market share of some of the leading countries operating in the
Insurance sector, the following picture emerges in front of us.
Country Total Life Premium
(in $bn.)
Market Share (%)
US 517.0 26.2
Japan 375.9 19.5
UK 194.0 10.11
France 154.0 7.81
Italy 91.7 4.65
Germany 90.2 4.57
China 39.5 2.1
Taiwan 38.8 1.97
India 20.1 1.02
Others 452.8 22.07
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Source: The Economic Times, dated – 20th July, 2006.
The above figure shows that US is still the leader in Life Insurance
sector, closely followed by Japan. India’s share in the global market
has doubled since 2000 (0.50%) to 2005 (1.02%), but the growth of
china is the maximum from 0.79% in 2000 to 2.10% in 2005. The total
premium received in life insurance sector has increased from $ 1,521
bn. in 2000 to $ 1,974 bn. in the year 2005.
Shares of different countries in Life Insurance
517
375.9
19415491.7
90.239.538.820.1
452.8USJapanUKFrance ItalyGermanyChinaTaiwanIndiaOthers
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1.4.1 CONCERNS IN GLOBAL INSURANCE INDUSTRY
INSURANCE FRAUD
One of the major problems which is faced by this industry is
insurance fraud. Property insurance fraud cost insurers about $30
billion in 2004. Every year more than $100 billion is stolen from
Medicare and Medicaid programs across the world in health
insurance.
Fraud may be committed at different points in the insurance
transaction by different parties like applicants for insurance,
policyholders, third-party claimants and professionals who provide
services to claimants in the industry
Common frauds include "padding," which means that the one who
commits fraud will inflate the actual claims. This is done by
misrepresenting facts on an insurance application or submitting
claims for injuries or damage that has never occurred.
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1.5 INDIAN SCENARIO:
INDIAN INSURANCE INDUSTRY
Private Sector (15)
Public Sector (1)
PublicSector (4)
Private Sector (9)
LIFE INSURANCE
NON LIFE INSURANCE
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1.5.1 LIFE INSURANCE:
Insurance business in India is growing at an annual rate of
21.9%.together with banking services, it accounts for 7.1% of GDP.
But insurance penetration as compared to other nations of the world
is very low in India. In 2004-05 it was 2.53% for life insurance and .65
% for non life insurance.
Life insurance penetration in India was less than 1% till 1990-
91.during the 90s it was between 1-2% and from 2001 onwards it is
over 2%.this is due to active role played by IRDA in licensing private
players and taking steps to increase awareness among masses.
India’s insurance sector is poised for explosive growth powered by
better penetration into rural and semi urban regions. Gross insurance
premiums have been rising. The gross premium collected in the last
fiscal year was Rs 27000 crores as compared to that of Rs 25343
crores in the last year.
Since liberalization of insurance sector in 2001, 14 life insurance
companies have entered the market out of which 13 are joint
ventures with international companies. While private players have
eaten up a part of LIC’s market share, PSU behemoth has been
witnessing tremendous growth. LIC’s premium collection was RS
18000 crores as compared to only Rs 200 crores in 1957.LIC’s
premium accretion grew by 42% last year. Among the private players
companies like Bajaj-Allianz and ICICI have captured the major
portion of the market and others are still trying to establish
themselves in the Indian market.
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1.5.2 GENERAL INSURANCE:
General insurance in India has been expecting growth except in
some portfolios like motor insurance, fire and engineering. These
portfolios are still under tariff- this means that premium depends on a
fixed predetermined rate structure.
In India, GDS as a proportion of GDP at current prices increased from
26.1% in 2002-03 to 28.1% in 2003-04.house hold sector continued
to be the major contributor to GDS at 24.3% in 2003-04.this can be
attributed to soft interest rates prevailing in housing sector. General
Insurance has low market penetration. It is 1.95% and ranks 51st.
However in collection of premium it is ranked 23rd. The ratio of the
premium collected to that of GDP is 0.58. The main reason for the
general insurance industry to perform very poorly was because of the
slow settlement of claims. Moreover the rates of claim in India were
highest in the world. It was 70 percent compared to 40 percent
internationally. This meant that out of 100 people who had insured
their commodities 70 claimed for a loss or damage. The main reason
for the lack of demand for general insurance is that people consider it
as an unnecessary expenditure. However it must be noted that the
general insurance has been earning consistent profits and has an
efficient dividend paying record accompanied by a steady growth in
its financial resources. The industry is recognized as one of the
largest financial Institutions in the country. Some of the private
players in this sector are- ICICI – Lombard, Reliance, Royal-
Sundaram, Chholamandalam etc.
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1.5.3 PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR:
The different private players in the life insurance sector and their
associations with foreign companies are being given below:
COMPANY INDIAN
PROMOTER/PARTNER
FOREIGN
INSURER
TOTAL
CAPITAL
(RS MN.)
FDI
(%)
FOREIGN
CAPITAL
(RS MN.)
AMP
SANMAR
RELIANCE
GROUP(ADAG)
None 2,170 0 0
Aviva Life Dabur Aviva (UK) 4,590 26 1193.4
Bajaj-
Allianz
Bajaj Auto Allianz
(Germany)
3680 26 960
Birla Sun
Life
Aditya Birla Group SunLife
(Canada)
4,000 26 1,040
HDFC
Standard
HDFC StandardLife
(UK)
2,500 18.9 470
ICICI
Prudential
ICICI Bank Prudential (UK) 10,850 26 2,820
ING Vysya Vysya Bank ING Ins.
(Netherlands)
4,400 26 680
Kotak
Mahindra
Old Mutual
Kotak Mahindra Bank OldMutual
(South Africa)
2,600 26 680
Max
Newyork
Max India NewYorkLife
(US)
5,000 26 1,300
Met Life J&K Bank Met Life (US) 3,550 26 920
Sahara
Life Ins. I
Sahara India None 1,000 0 0
SBI Life SBI Cardiff (France) 3,500 26 910
TATA AIG TATA Group AIG (US) 3,810 26 990
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Shriram Shriram Sanlam Life Ins.
Some of the new companies who are waiting to come in to the life
insurance sector are:
a) IDBI-FORTIS.
b) AXA-BHARTI &
c) Syndicate Bank.
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Source: IRDA Report.
Source: IRDA Report
LIC market share continued to decline in the period up to March,
2006, it declined to 71.44% from 78.23% in the same period last year.
On the other hand the market share of the private players is
continuously growing up; it increased to 28.56% from 21.77% in
terms of insurance premium.
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Source: IRDA Report
BAJAJ ALLIANZ BECOMES THE MARKET LEADER AMONG PRIVATE PLAYERS:
Bajaj Allianz has taken over from ICICI Prudential as the number one
among the private players in the life insurance sector in terms of
insurance premium collected by each company. This was mainly
possible because of increase in the number of agents in Bajaj Allianz
by 1.2 lakh and also an increase in the number of branches (more
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than 550 branches in total). The increase in the growth rate of Bajaj
Allianz is 215.76% when compared to the same of the last financial
year. The market share of Bajaj Allianz increased to 7.56%, while the
same for ICICI is only 7.35%.
1.6 CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN ECONOMY:
Some surveys have predicted that India and China will play a very
vital role in the years to come. Indian economy can be termed as an
emerging economy as it is doubling its GDP in 3 to 5 years and
moreover it is not dependent on any particular sector for its GDP.
If we look at the GDP of the Indian economy very closely over the
years, we can easily come to know the changing structure of the
economy. We can also come to know the changing contribution of the
various sectors like agriculture, manufacturing and the service sector.
In the financial year 1993-94, agricultural sector contributed to 31%,
manufacturing accounted to 26.3% and the service sector contributed
to 42.7% of the total GDP of the country. Thus over the years as India
became an emerging economy in 2003-04 manufacturing sector
contributed for 21.7 %, manufacturing contributed for 26.8 whereas
service sector contributed for 51.4% of the total GDP.
There has been 7.5% growth in the total GDP of the country and is
estimated to grow at 7.5% in 2005-06. The Indian economy has
shown signs of strong performance despite a rise in oil prices, high
inflation rate and abnormal rains in many parts of the country. The
overall growth of the Indian economy has been equally supported by
all the three sectors of the economy, i.e. the agriculture,
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manufacturing and the service sector. Insurance, together with the
banking sector, contributes to about 7.1 % of the total GDP of India,
and the gross premium collected contributes to about 2% of the total
GDP of the country
The insurance sector in India has completed 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 200 years.
1.7 GOVERNMENT POLICIES REGARDING LIFE INSURANCE:
Some of the important acts which have been passed in India to
regulate insurance industry are mentioned here:
a) Insurance Act 1938: It was the first comprehensive piece of
insurance legislation in the country governing both life and non life
insurance business. It was aimed to prevent the growth of
mushrooming companies and to prevent misappropriation of funds
and to protect assets. This act had a strict control over the insurance
business and was amended from time to time. Till 1945, it was
amended 6 times. Under the chairmanship of Shri Kavas Ji Jahangir,
a committee was appointed to investigate all the misconduct of
insurance business. According to this act, the central government had
control over the insurance business through the Controller of
Insurance. The insurance companies must follow the rules and
regulations else they would be penalized.
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The act of 1938 applied to all types of insurance business-life, fire,
marine etc. It also governed the provident companies, mutual offices
and cooperative societies. According to one of the provisions of this
act, there is prohibition of transaction of insurance business by
certain persons.
To prevent the growth of insurers of small financial resources, this act
provided for registration of all insurers and a substantial deposit in the
RBI.
Further under this act, no person shall, after the commencement of
this act, begin to carry any class of insurance business in India and
no insurer carrying on any class of insurance business in India shall
after the expiry of 3 months from the commencement of this act,
continue to carry on any such business unless he obtained the
certificate of registration for the particular class of insurance
business.
b) Life Insurance Corporation Act 1956
Life insurance business in India was nationalized with effect from
January 19, 1956.on the date, 16 non Indian insurers operating in
India and 75 Provident Societies were taken over by Government of
India. This act came into effect from July 1st 1956.Life Insurance
Corporation of India commenced its functioning as a corporate body.
Under this act, LIC shall be a body having perpetual succession and
a common seal with power, subject to the provisions of this act to
acquire, hold and dispose of property and may by its name sue and
be used.
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The original capital of the corporation shall be Rs 5 crores provided
by the government and the terms and conditions relating to the
provisions of capital shall be determined by the central government.
It is the general duty of the corporation to carry on life insurance
business whether in India or outside, and the corporation shall
exercise its powers under this act towards the development of life
insurance business to the best of the
advantage of the community.
C) Insurance Regulatory and Development Authority (IRDA) 1999
Reforms in the insurance sector were initiated with the passage of the
IRDA bill in December 1999.it was set up as an independent body
and it has been able to frame globally compatible legislations.
The IRDA was set up to protect the interests of holders of insurance
policies ,to regulate ,promote and insure orderly growth of the
insurance industry and for matters connected therewith or incidental
thereto.
This act extends to whole of India. With the establishment of this act,
government amended Insurance act 1938, Life Insurance Act 1956
and General Insurance Act 1972.
IRDA was formed on the recommendations of Malhotra Committee.
In 1999 government of India has set up Malhotra Committee to
examine the structure of insurance industry and recommend
changes, under R.N Malhotra –former governor of RBI.
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Some of the recommendations made by Malhotra committee
were:
1. Raising the capital base of LIC and GIC up to Rs 200 crores,
half retained by the government and rest sold to public
2. Public sector is granted permission to enter insurance industry
with a minimum paid capital of Rs 100 crores.
3. Foreign insurance companies may be allowed to enter by
floating with an India company preferably by a joint venture.
4. Limited number of private companies to be allowed in the
sector but no firm can be allowed to operate in both life and non
life sectors with the same entity.
5. Tariff Advisory Commission (TAC) is delinked from GIC to
function as a separate body under the supervision of the
insurance regulatory authority.
6. All insurance companies to be treated on equal footing and
governed by the provisions of insurance act. No special
dispensation shall be given to the government companies
7. Setting up of a strong and effective regulatory body with
independent source for financing before allowing private
companies in this sector
On the basis of the recommendations Insurance Regulatory Authority
(IRA) bill was introduced in the parliament in 1996.later in 1999 IRA
bill was renamed as IRDA and was introduced in the parliament.
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Under this act a certificate of registration is issued to the
applicant to review, modify, withdraw, suspend or cancel such
registration.
It also specifies requisite qualification and practical training for
insurance agents.
It promotes efficiency in the insurance business and specifies
code of conduct for surveyors and loss assessors.
It also specifies the manner in which the books of accounts of
the insurer and the insurance intermediaries shall be
maintained.
It regulates investment of funds by insurance companies
It regulates the margin of solvency
It also controls and regulates the rates, advantages, terms, and
conditions that may be offered by the insurer.
it also supervises the working of Tariff Advisory Committee,
which is related to the regulation of general insurance in India
it specifies the percentage of premium income of the insurer to
finance schemes for promoting professional organizations.
It also specifies the percentage of life insurance business and
general insurance business to be undertaken by the insurer in
rural or social sector.
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2. ORGANIZATIONAL OVERVIEW
Before talking about ‘Reliance Life Insurance company Limited’, lets
have a brief introduction about its parent company which is “Anil
Dhirubhai Ambani Group” (ADAG). Reliance is a brand name which
was made popular by Mr. Dhirubhai Ambani all over the world and
the same tradition is being carried on by his son Mr. Anil Ambani.
After splitting with his brother Mr. Mukesh Ambani, Anil Ambani
created this ADAG and soon he has started to achieve the success
that once was started by his father.
2.1 WHAT IS ‘ADAG’?
The Reliance – Anil Dhirubhai Ambani Group is among India’s top
three private sector business houses on all major financial
parameters, with a market capitalisation of Rs 100,000 crore (US$ 22
billion), net assets in excess of Rs 31,500 crore (US$ 7 billion), and
net worth to the tune of Rs 27,500 crore (US$ 6 billion)
Across different companies, the group has a customer base of over
50 million, the largest in India, and a shareholder base of over 8
million, among the largest in the world.
Through its products and services, the Reliance - ADA Group
touches the life of 1 in 10 Indians every single day. It has a business
presence that extends to over 4,500 towns and 300,000 villages in
India, and 5 continents across the world.
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The interests of the Group range from communications (Reliance
Communications) and financial services (Reliance Capital Ltd), to
generation, transmission and distribution of power (Reliance Energy),
infrastructure and entertainment .
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2.1.1 STRUCTURE OF ‘ADAG’
2.1.2 VALUES/ OBJECTIVES OF ADAG:
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Shareholder Interest
We value the trust of shareholders, and keep their interests
paramount in every business decision we make, every choice we
exercise
People Care
We possess no greater asset than the quality of our human capital
and no greater priority than the retention, growth and well-being of
our vast pool of human talent
Consumer Focus
We rethink every business process, product and service from the
standpoint of the consumer – so as to exceed expectations at every
touch point
Excellence in Execution
We believe in excellence of execution – in large, complex projects
as much as small everyday tasks. If something is worth doing, it is
worth doing well.
Team Work
The whole is greater than the sum of its parts; in our rapidly-
changing knowledge economy, organizations can prosper only by
mobilizing diverse competencies, skill sets and expertise; by
imbibing the spirit of “thinking together” -- integration is the rule,
escalation is an exception
Proactive Innovation
We nurture innovation by breaking silos, encouraging cross-
fertilization of ideas & flexibility of roles and functions. We create an
environment of accountability, ownership and problem-solving –
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based on participative work ethic and leading-edge research.
Leadership by Empowerment
We believe leadership in the new economy is about consensus
building, about giving up control; about enabling and empowering
people down the line to take decisions in their areas of operation
and competence…
Social Responsibility
We believe that organizations, like individuals, depend on the
support of the community for their survival and sustenance, and
must repay this generosity in the best way they can
Respect for Competition
We respect competition – because there’s more than one way of
doing things right. We can learn as much from the success of others
as from our own failures.
2.1.2 VISION OF ADAG:
To build a global enterprise for all our stakeholders, and
A great future for our country,
To give millions of young Indians the power to shape their destiny,
The means to realize their full potential…
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2.2. COMPANIES UNDER ‘ADAG’:
A) Reliance Capital
Reliance Capital (RCL) is one of India’s leading and fastest growing
private sector financial services companies, and ranks among the top
3 private sector financial services and banking companies, in terms of
net worth.
The company has interests in asset management and mutual funds,
life and general insurance, private equity and proprietary investments,
stock broking and other activities in financial services.
RCL is registered as a depository participant with National Securities
Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL)
under the Securities and Exchange Board of India (Depositories and
Participants) Regulations, 1996. RCL has sponsored the Reliance
Mutual Fund within the framework of the Securities and Exchange
Board of India (Mutual Fund) Regulations, 1996.RCL primarily
focuses on funding projects in the infrastructure sector and supports
the growth of its subsidiary companies, Reliance Capital Asset
Management Limited, Reliance Capital Trustee Co. Limited, Reliance
General Insurance Company Limited and Reliance Life Insurance
Company Limited. As of March 31, 2005, the company’s investment
in infrastructure projects stood at Rs. 1071 Crores. The investment
portfolio of RCL is structured in a way that realizes the highest post-
tax return on its investments.
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B) Reliance Communication Ventures Limited :
The flagship company of the Reliance – ADA Group, Reliance
Communication Ventures Limited, is the realisation of our founder’s
dream of bringing about a digital revolution that will provide every
Indian with affordable means of communication and a ready access
to information.
The company began operations in 1999 and has over 20 million
subscribers today. It offers a complete range of integrated telecom
services. These include mobile and fixed line telephony, broadband,
national and international long distance services, data services and a
wide range of value added services and applications aimed at
enhancing the productivity of enterprises and individuals.
C) Reliance Energy Limited
Reliance Energy Limited, incorporated in 1929, is a fully integrated
utility engaged in the generation, transmission and distribution of
electricity. It ranks among India’s top listed private companies on all
major financial parameters, including assets, sales, profits and
market capitalization.
It is India’s foremost private sector utility with aggregate estimated
revenues of Rs 9,500 crore (US$ 2.1 billion) and total assets of Rs
10,700 crore (US$ 2.4 billion).
Reliance Energy Limited distributes more than 21 billion units of
electricity to over 25 million consumers in Mumbai, Delhi, Orissa and
Goa, across an area that spans 1,24,300 sq. kms. It generates 941
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MW of electricity, through its power stations located in Maharashtra,
Andhra Pradesh, Kerala, Karnataka and Goa.
The company is currently pursuing several gas, coal, wind and hydro-
based power generation projects in Maharashtra, Uttar Pradesh,
Arunachal Pradesh and Uttaranchal with aggregate capacity of over
12,500 MW. These projects are at various stages of development.
Reliance Energy Limited is vigorously participating in emerging
opportunities in the areas of trading and transmission of power. It is
also engaged in a portfolio of services in the power sector in
Engineering, Procurement and Construction (EPC) through a network
of regional offices in India.
D) Reliance Health
In a country where healthcare is fast becoming a booming industry,
Reliance Health is a focused healthcare services company enabling
the provision of solution to Indians, at affordable prices. The company
aims at providing integrated health services that will compete with the
best in the world.It also plans to venture into diversified fields like
Insurance Administration, Health care Delivery and Integrated Health,
Health Informatics and Information Management and Consumer
Health.
Reliance Health aims at revolutionising healthcare in India by
enabling a healthcare environment that is both affordable and
accessible through partnerships with government and private
businesses.
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E) Reliance Media & Entertainment
As part of the Reliance - ADA Group, Reliance Entertainment is
spearheading the Group’s foray into the media and entertainment
space. Reliance Entertainment’s core focus is to build significant
presence for Reliance in the Entertainment eco-system: across
content and distribution platforms.
The key content initiative are across Movies, Music, Sports, Gaming,
Internet & mobile portals, leading to direct opportunities in delivery
across the emerging digital distribution platforms: digital cinema,
IPTV, DTH and Mobile TV. Reliance ADA Group acquired Adlabs
Films Limited in 2005, one of the largest entertainment companies in
India, which has interests in film processing, production, exhibition &
digital cinema.
Reliance Entertainment has made an entry into FM Radio through
Adlabs Radio, having won 45 stations in the recent bidding, which will
soon be the Radio station with the largest footprint in India.
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2.3 RELIANCE LIFE INSURANCE COMPANY LIMITED:
As it has been presented before ‘Reliance Life Insurance Company
Ltd.’ Is a part of Reliance Capital which is again a part of ADAG.
Reliance Capital acquired 100% share of an Australian Based life
insurance company i.e. AMP SANMAR LTD. In October 2005, to form
the Reliance Life Insurance Company. Though the acquisition was
made in October, the functioning of Reliance Life has only started
from February, 2006. It is one of the two private players (along with
Sahara) in the life insurance sector which does not have any foreign
collaboration. The basic idea behind the formation of Reliance Life
was to provide the people of India with some better investment
alternatives as well as to make them aware about the usefulness of
life insurance for catering the future needs of them. Reliance life
insurance has a range of products which can fulfill the needs of both
the individual as well as corporate houses. So, it can be said that
Reliance Life is another step forward for Reliance Capital Limited to
offer need based financial services (life insurance) to individuals and
corporate houses.
2.3.1 GOALS TO ACHIEVE:
Reliance Life Insurance has the following goals to achieve in the near
future:
a) Emerge as a transnational life insurer of global scale and
standard.
b) Achieve impeccable reputation and credentials through
best business practices.
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c) To become the market leader among the private players
in the Indian life insurance sector by the end of the
current financial year.
2.3.2 MISSION:
Create unmatched value for everyone through dependable, effective,
transparent and profitable life insurance and pension plans.
2.3.3 VISION:
Empowering everyone live their dreams
2.3.4 GUIDING PRINCIPLES:
a) Customer care and satisfaction: The foremost responsibility for
an organization is to provide its customers utmost care and
satisfaction and Reliance Life is no exception in this regard.
The main objective of the organization is to provide the
customers with best possible financial plans which will match
their needs and the expectations.
b) Corporate Governance: In today’s modern business world
corporate governance is utmost essential, because it gives a
clear picture of the organization to its shareholders as well to
the general public at large. So, it is aim of Reliance Life to
maintain ethical practices in all their business transactions, to
promote a better picture of themselves.
c) Creativity and Innovation: After the IRDA ACT 1999, the private
players are also allowed to participate in the life insurance
sector, and this has opened a vast area of field to operate for
many of the companies and that’s why we see that not less
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than 15 players have entered the market in the last few years.
So, to survive in this market, the goal of reliance Life is
‘Creativity and Innovation’ which is the best way to success for
any organization.
d) Competitiveness: It provides the base for any organization to
operate in any area of business and life insurance is no
exception. Competitiveness provides the urge for any company
to outperform their competitors in the market and become the
leader in that particular sector. It is the competitiveness which
has impelled Reliance life to set a goal such as to become the
market leader among all the private players by the end of the
current financial year.
2.3.5 DEPARTMENTS AND BRANCHES OF RELIANCE LIFE
INSURANCE COMPANY LIMITED:
Branches:
There are more than 200 branches of Reliance life spread all over
the country, the head office being situated in Chennai. In the city of
Bangalore though there are only three (3) branches of Reliance life
and those are situated in:
a) Malleswaram
b) Jayanagar and
c) Indiranagar.
They are planning to open new branches at places like Mahatma
Gandhi Road and Koramangla very soon.
Departments:
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The various departments that can be seen in an insurance
organization and that has been observed by me are as follows:
a) Marketing Department: This department mainly deals with the
marketing and promotion part of the Insurance Company. They
spend most of their time in formulating strategies to make their
products known to the common people and to promote the
same in a easy and cost effective way.
b) Sales Department: This department mainly deals with the
sales part of the Insurance Company; the department includes
designations like Sales Manager and Financial Advisor who
personally contacts with people for performing the task of sales
of various products.
c) Accounts/ Financial Department: This department has the
task of keeping track of the various expenses incurred by the
various other departments of the organization and also
performs the task of allocating various funds to different
departments according to their requirements.
d) Human Resource Department: This department is handled by
the Human Resource manager of the company. The function of
this department involves the well being of the employees of the
company, I,e, to see whether there is employee grievance in
the organization or not and if it is there what are the possible
causes for that and also try to find out solutions for the same if
possible.
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e) Investment Department: This department deals with the task
of investing the money of the policy holders in such way that
will ensure both safety of the money and also a steady return
on the same. The task of this department is very difficult as it
deals with the money given by the policy holders, so it requires
lot of thinking on the part of the personnel of this department
before deciding where to invest the money.
Actuarial Department: This department is under the supervision of
an Actuary who decides the premiums and charges to be taken from
the policy holder on the basis of certain information’s (like Age,
Annual Income etc.) provided by the prospective customer. The task
also involves the calculation of mortality charges which requires high
statistical knowledge from one’s point of view. So, this department
involves in the calculation of various amounts to be charged from the
prospective customers.
2.3.6 RELIANCE LIFE INSURANCE PRODUCTS:
Reliance Life Insurance has products which can meet the needs of
both the individuals as well as the corporate houses. The products of
the Reliance Life can be subdivided broadly into two segments,
namely:
a) Individual Products. &
b) Group Products.
2.3.6.1: INDIVIDUAL PRODUCTS:
These products are offered by Reliance Life by mainly focusing to the
needs of the individual persons, these products will offer them the
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best solutions possible to their different needs. The products offered
under this category are as follows:
i) ENDOWMENT PLAN: This plan provides an easy and
inexpensive way to protect the needs of the customer,
his/her family and the business of the customer. In this plan
the customer has the option of choosing the sum assured on
the basis of his current financial condition and probable
future expenses, he also has the option of choosing the term
of the plan. In the event of untimely death, this plan will
provide all the support necessary to the beloved ones of the
policy holder.
ii) SPECIAL ENDOWMENT PLAN: This insurance policy is
designed for the people who want to combine savings with
extended security. The special feature of this plan is, the
customer will get the benefit ( life protection) of the plan even
after 5years from the date on which the customer has
stopped paying the premium. This policy can also be taken
as one which can also be participate in the profit of the
company.
iii) CASH FLOW PLAN: This policy is designed for the people
who have a recurring need of reinvestment in the business
or look for short-term investment channels. The advantage
of policy is in no time the customer has to pay a sizable
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amount of money as premium and on the other hand he can
ensure a periodic return of a lump sum amount which can
become a basis for reinvestment at a later period.
iv) CHILD PLAN: This insurance policy is designed for those
people who wish to save money for a future time when there
will be a recurring need of substantial amount of money. This
is specially true when someone needs money for the higher
education of his son or daughter. The unique feature of this
policy is that the risk cover continues for the full sum assured
even when the periodical payments are being made.
v) TERM PLAN: This insurance policy is designed for those
people who want only life cover for their family and does not
want to save anything for themselves. It can also be useful
for business house who want to cover their businesses
against the sudden loss of partners or key manpower. The
premium charged for this policy is comparatively low than
the other policy offered by Reliance Life.
vi) WHOLE LIFE PLAN: This insurance policy is designed for
those people who does not want to avail any benefit for
themselves but rather want to create an immediate estate to
protect their family by availing of insurance cover on their life
at a very low cost. The unique feature of this policy is that
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the risk cover continues throughout the duration of the policy
holder’s life irrespective of the period of premium payment.
vii) MARKET RETURN PLAN (ULIP): In this policy one can
have the twin advantage of insurance protection as well as
reaping the benefits of investment growth. It is a flexible plan
which works throughout the life and meets the changing
requirements like additional protection, liquidity through
cash, option to invest in different asset class and many
more.
viii) GOLDEN YEAR PLAN: This policy is a flexible package that
gives the customer the freedom of choice in choosing the
type of investment, life cover, vesting options such as
commuting and annuity options. This policy is available for
all individuals ranging between the age of 18-65.
2.3.6.2 GROUP PRODUCTS: These insurance products are mainly
designed keeping in mind the needs of the group of people in an
organization or any other place. The various plans under this
category are as follows:
i) TERM ASURANCE PLAN: This policy is a one year
renewable term assurance contract. The sum is paid on the
happening of the event for which the policy was taken with in
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the one year. After one year the policy can be further
renewed for one more year.
ii) RELIANCE EMPLOYEE DEPOSIT LINKED INSURANCE
SCHEME (EDLI): All establishments which have at least 10
full time employees and which come under the purview of
Employee’s provident fund and miscellaneous provisions act
1952, have a provision to undertake Employee Deposit
linked Insurance Scheme to provide life insurance to their
employees. Reliance EDLI has been approved as a
substitute for the EDLI scheme 1976 that was provided
earlier.
iii) RELIANCE GROUP GRATUITY POLICY: It is a policy that
offers various services to manage the gratuity obligations of
any particular organization. It helps the management to
provide all the benefits of gratuity to the employees with out
requiring proper control from their behalf.
iv) RELIANCE GROUP SUPER ANNUATION POLICY: It is a
policy that offers various services to manage the
superannuation obligations of any particular organization. It
gives a choice to the organizations to tailor the super
annuation facilities fir their employees according to their
convenience.
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2.3.7 ‘SWOT’ ANALYSIS OF RELIANCE LIFE INSURANCE
COMPANY LIMITED:
STRENGTHS:
a) Impeccable brand name of ‘Reliance’.
b) Sound financial and infrastructural backup.
c) Real urge to become the leader in the market.
d) The success in one of the fields in Reliance may create a good
feeling with in the customers about Reliance Life Insurance
also.
WEAKNESSES:
a) Unawareness among the people about Reliance Life Insurance.
b) Recent split in the top management may have a bad impact on
the general people who believe in family bodings even in
business matters.
c) As they have recently come to the insurance sector, not aware
of the pros and cons of the sector.
OPPORTUNITIES:
a) Many people now days are being aware of the benefits of
insurance, so there is a vast market to target by the company.
b) 80% of the total population in India is still not covered by any
Life Insurance Policy, so there is a vast market that can be
tapped by Reliance.
c) Reliance group already has a huge number of customers in
different fields of operation, so there is a possibility that those
people may be willing to invest in this area also.
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THREATS:
a) Most of the people still believe on public players like LIC, so it is
very hard to shift those customers from LIC to other companies
like Reliance.
b) The number of players in the private insurance sector is
increasing day by day, so the competition is getting tough.
c) The failure in one of the fields of Reliance may affect adversely
the business opportunities of Reliance Life Insurance.
2.4. Explanation of the 7-S Framework of McKinsey
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2.4.1 What is the 7-S Framework?
The 7-S Framework of McKinsey is a management model that
describes 7 factors to organize a company in a holistic and
effective way. Together these factors determine the way in which a
corporation operates. Managers should take into account all seven of
these factors, to be sure of successful implementation of a strategy.
Large or small. They're all interdependent, so if you fail to pay proper
attention to one of them, this may affect all others as well. On top of
that, the relative importance of each factor may vary over time.
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2.4.2Origin of the 7-S Framework : History
The 7-S Framework was first mentioned in "The Art Of Japanese
Management" by Richard Pascale and Anthony Athos in 1981. They
had been investigating how Japanese industry had been so
successful. At around the same time that Tom Peters and Robert
Waterman were exploring what made a company excellent. The
Seven S model was born at a meeting of these four authors in 1978.
It appeared also in "In Search of Excellence" by Peters and
Waterman, and was taken up as a basic tool by the global
management consultancy company McKinsey. Since then it is known
as their 7-S model.
2.4.3The Mckinsey 7S Framework
In recent years, the 7S framework for management analysis
developed by the respected consulting firm of Mckinsey & Company
has gained in popularity. The Mckinsey’s 7S framework essentially
looks at seven elements of an organization that must be understood
when seeking to work out how it works and how to bring about any
sort of change in the organization.
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These seven elements play a significant role in any organization and
the Mckinsey 7S framework gives an insight into the integration of
these significant elements. The outstanding feature of the 7S
framework is that it has been tested extensively by Mckinsey
consultants in their studies of many companies. At the same time this
framework has been used by respected business schools such as
Harvard and Stanford. Thus, theory and practice seem to support
each other in the study of management.
a) Style
"Style" refers to the management style or the leadership style that is
followed by the superiors in an organization to carry out different
activities in the organization. Style is basically the way the
management behaves and collectively spends it’s time to achieve
organizational goals. There are a lot of different management and
leadership styles in use but the most popular ones are: -
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Exploitive Autocratic
Benevolent Autocratic
Participative
Democratic
b) Systems
In an organization, "systems" refer to the procedures and processes
such as information systems, manufacturing processes, budgeting
and control processes. When taking into consideration the systems of
any organization, things such as the customization of the systems,
tailoring those systems to individual managers, the setting up of
objectives for those systems, economizing those systems, the
flexibility of the systems and blending those systems into the
organizational environment, come into any manager’s mind.
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It is these elements of concern associated with the Systems of the
organization that Mckinsey consultants have included this issue of
Systems of the organization into their framework.
c) Staff
The term "Staff" refers to the people in the organization and their
socialization into the organizational culture. This includes Staffing that
is the filling, and keeping filled positions in the organizational
structure through identifying work-force requirements, recruiting,
selecting, placing, promoting, appraising, planning the careers,
compensating, and training or otherwise developing both candidates
and current job holders to accomplish their tasks effectively and
efficiently. Plus this also implies towards the chosen culture of the
organization and the selection of employees according to that particular
organizational culture and the fact that whether the employees have blended into
and accepted the culture or not.
d) Structure
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"Structure" is the organizational structure or the hierarchy of the
organization that comprises of the authority and responsibility
relationships in the firm. This function of the framework is concerned
with the direction of delegation of authority, the organizational
structures, whether Flat or Tall and the degree of Centralization or
Decentralization. Structure is closely related to Staff as the size of the
staff greatly impacts the type of structure that the organization has. It
is also dependant upon the Style of management preferred by the
superiors in the organization, as it is the preference of the top
management that really matters in the real world on the type of
organizational structure being applied.
e) Strategy
The systematic actions and the allocation of resources to achieve the
organizational objectives and aims is referred to as "Strategy". There
are many predefined strategies but the management can effectively
create some other strategy through the use of creative techniques
like brainstorming or professional approach such as the Delphi
Technique.
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f) Shared vision
"Shared vision" or Super ordinate goals are the values held and
shared by the members of an organization. By using the term Shared
Values, the 7S theorists emphasize that goal statements are very
important in determining the destiny of the organization; they also
point out that the organization members must share values equally.
Therefore, special attention is given to personal and organizational
values in order to increase organizational effectiveness.
g) Skills
These are the distinctive capabilities of an organization. In traditional
management literature the term "skills" refers to the personal skills
(e.g. technical, human, conceptual) while in the 7S framework "skills"
not only means this but it also points towards the capabilities of the
organization as a whole.
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Application of 7’s
a) STRUCTURE OF ‘ADAG’
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b) Shareholder Interest
We value the trust of shareholders, and keep their interests
paramount in every business decision we make, every choice we
exercise In the copany orgation People Care We possess no greater
asset than the quality of our human capital and no greater priority
than the retention, growth and well-being of our vast pool of human
talent We also gives the different way to focusing the consumer to
We rethink every business process, product and service from the
standpoint of the consumer – so as to exceed expectations at every
touch point
Excellence in Execution
We believe in excellence of execution – in large, complex projects
as much as small everyday tasks. If something is worth doing, it is
worth doing well.
Team Work
The whole is greater than the sum of its parts; in our rapidly-
changing knowledge economy, organizations can prosper only by
mobilizing diverse competencies, skill sets and expertise; by
imbibing the spirit of “thinking together” -- integration is the rule,
escalation is an exception
Proactive Innovation
We nurture innovation by breaking silos, encouraging cross-
fertilization of ideas & flexibility of roles and functions. We
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create an environment of accountability, ownership and problem-
solving –based on participative work ethic and leading-edge
research.
c) Style
Reliance insurance have a different working style in different area’s those are followings.
Leadership by Empowerment
We believe leadership in the new economy is about consensus
building, about giving up control; about enabling and empowering
people down the line to take decisions in their areas of operation
and competence…
Social Responsibility
We believe that organizations, like individuals, depend on the
support of the community for their survival and sustenance, and
must repay this generosity in the best way they can
Respect for Competition
We respect competition – because there’s more than one way of doing things right. We can learn as much from the success of others as from our own failures.
Generally company use the style to develop the first relianshionship to customer then after the start the business with him. Give the good product .in this way customer can satisfy and second time
d) Strategy
To build a global enterprise for all our stakeholders, and
A great future for our country,
To give millions of young Indians the power to shape their destiny,
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
The means to realize their full potential…
Our strategy for insurance is to keep the customer satisfaction as
focal point of all our operations, adopt the best international practices
in underwriting, claims and customer service, be the most innovative
in product development, establish presence all over India, ensure
sustained value addition to all stake holders and to uphold Corporate
Value & Corporate Governance.
e) Staff
There are more than 200 branches of Reliance life spread all over the
country, the head office being situated in Chennai. In the city of
Bangalore though there are only three (3) branches of Reliance life
and those are situated in a) Malleswaram b) Jayanagar and c)
Indiranagar. In organization divided in to different depart on the bases
of hiss work like Marketing Department Sales Department Accounts/
Financial Department Human Resource Department Investment
Department Actuarial Department. In these department are to train
person on the base of his work .because of it more useful to for his
work. Sales person fist he pass the exam then after company issue
the license .After time by time company arrange the different product
train to the agent and other staff member it helps to easy to convenes
to customer.
f) Skill
Skill is most important to all the staff member because of insurance
business is
Intangible there for very difficult to convenient to the people. In
insurance business also skill required for calculation of premium or
109
A PROJECT REPORT ON RELIANCE LIFE INSURANCE
claims calculation or under writer, In big insurance took by any
person or company at this time for reinsurance skill person required.
Reliance life insurance company having a very good skill person
because we saw the within one years company get good perform.
g) System
The Company recognizes that the security of information requires an
ongoing commitment. Towards this end a security program would
provide a continuous cycle for assessing risk, developing and
implementing effective security procedures, and monitoring the
effectiveness of those procedures. We want to guarantee the
reliability, confidentiality and availability of critical information. To that
end, we will continue implementation of our strategy for enhancing
information security management controls.
We are in a challenging environment, dealing with all the changes in
technology, the insurance industry, the IRDA regulations and the
workplace. The expectations of what information technology (IT) can
do to benefit the business and its customers continue to grow. We've
been working hard to provide day-to-day IT services, while keeping
our eye on where the Company is headed strategically, and also
transforming the IT organization to meet future requirements.
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
3. RESEARCH PROBLEM
3.1. RESEARCH PROBLEM: The problem of research was- “To
make a study of the consumer’s perception about Life Insurance
sector (I.e. how they perceive about life insurance and what
criteria’s they consider before taking a life insurance policy) and to
study the brand awareness of Reliance Life among them”. The
study was carried out with the following objectives in mind:
a) To know about the various Investment alternatives that is mostly
preferred by the people.
b) To find out the important criteria’s that people think are
important before investing in a life insurance policy and
c) To find out the brand awareness of Reliance Life Insurance
among the people.
3.2. RESEARCH METHODOLOGY: To analyze the problem
given and to conduct the study among the people, the surveying
was done with the help of a ‘Questionnaire’ (which is attached as a
part of the annexure in the report) was adapted. To know the
consumer’s perception about what they think is important before
taking a life insurance policy, eight (8) main criteria’s were listed
out to them, those are:
a) Premium
b) Charges taken by company,
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
c) Policy Term
d) Rider Benefits provided by the company
e) Bonus and interest paid by the company
f) Services provided by company (pre and post sales),
g) Accessibility of the company &
h) Company Image.
3.3. SAMPLE SIZE: After due consultation with the company
supervisor as well as with the college guide, also keeping in mind the
requirements of the company for the research, the sample size that
was found to be appropriate for the study was 100.
3.4. SAMPLING TECHNIQUE: The sampling technique that adapted
to conduct the survey was ‘Simple Random Sampling’ and the area of
the research was concentrated in the city of Bangalore only. The
survey was conducted by visiting different Reliance web world
branches in places like koramangala and Jayanagar in the city of
Bangalore.
3.5 RESEARCH FINDINGS:
Various Investment Alternatives Available to consumers:
To begin with the analysis, let us see what are the various
investment alternatives that are available to the people and among
that which are the most preferred one. Now, from the data
collected from the 100 respondents which were surveyed through
the questionnaire, the following representation can be made:
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
Investment Alternatives Preffered by People
50, 18%
41, 15%
33, 13%33, 13%
31, 12%
26, 10%
21, 8%
19, 7%10, 4%
Insurance
Mutual Fund
PPF
Real Estate
Bank Deposits
Equity
Post Office
Gold and Silver
Bonds and Debntures
So, from the above representation it can be seen that 18% of the
people think that Insurance is the most preferred investment
alternative that is available to them, followed by alternatives such
as Mutual Fund (15%), PPF (13%), Real Estate (13%) etc. The
reason that can be attributed for the liking of people towards
insurance may be because of that insurance provides both life
cover as well as security to the holder of the policy and also to the
family members of the insurance holders. As well as now a days
insurance are also providing option to invest in the markets
through plans like ULIP, which gives the holder both the life cover
as well as an opportunity to earn income at the market rate. So,
these are the reasons why people like to invest in the insurance in
comparison to others.
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
SEGMENTATION OF THE RESPONDENTS ON THE BASIS OF
CERTAIN IMPORTANT CRITERIA’S:
Now, let turn our attention towards the respondent who were
covered under this study. These respondents can be categorized
on the basis of certain important criteria like age group, annual
income, have previous life insurance policy and awareness about
Reliance Life Insurance in the following way:
Age group: age group
58 58.0 58.0 58.0
31 31.0 31.0 89.0
7 7.0 7.0 96.0
3 3.0 3.0 99.0
1 1.0 1.0 100.0
100 100.0 100.0
< 30 yrs.
31 - 40 yrs.
41 - 50 yrs.
51 - 60 yrs.
> 60 yrs.
Total
ValidFrequency Percent Valid Percent
CumulativePercent
age group
age group
> 60 yrs.51 - 60 yrs.41 - 50 yrs.301- 40 yrs.< 30 yrs.
Fre
quen
cy
70
60
50
40
30
20
10
0
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
From this representation we can see that 58% of the respondent belonged to the age group of below 30 years, followed by 31% who belonged to the age group between 31-40 years and the other persons were who belonged to other age groups were small in number.
Annual income
From the above representation we can see that 31% of the respondents belonged to a group which has an annual income of more than 5 lakh, followed by 27% who belonged to the group of annual income between 1-3 lakh and 23 % who have an annual
annual income
17 17.0 17.3 17.3
27 27.0 27.6 44.9
23 23.0 23.5 68.4
31 31.0 31.6 100.0
98 98.0 100.0
2 2.0
100 100.0
< Rs. 1 lakh
Rs. 1.01 - 3 lakh
Rs. 3.01 - 5 lakh
> Rs. 5 lakh
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
annual income
annual income
> Rs. 5 lakhRs. 3.01 - 5 lakhRs. 1.01 - 3 lakh< Rs. 1 lakh
Fre
quen
cy
40
30
20
10
0
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
income between 3-5 lakh. Among the 100 respondents, two of them were unwilling to express their annual income to us, which represents the missing system in the chart presented above.
Hold life insurance policyhold life insurance policy
23 23.0 23.0 23.0
77 77.0 77.0 100.0
100 100.0 100.0
no
yes
Total
ValidFrequency Percent Valid Percent
CumulativePercent
hold life insurance policy
hold life insurance policy
yesno
Fre
qu
en
cy
100
80
60
40
20
0
Among the 100 respondents that were taken as a sample size, 77 of them had life insurance policy that was either taken by him/her self or it was taken by their parents on their name, while 23 of them did not have any kind of Life insurance policy from any company.
Awareness about-Reliance Life
awareness-RIL
64 64.0 64.0 64.0
36 36.0 36.0 100.0
100 100.0 100.0
no
yes
Total
ValidFrequency Percent Valid Percent
CumulativePercent
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
awareness-RIL
awareness-RIL
yesno
Fre
qu
en
cy70
60
50
40
30
20
10
0
Now coming to the point of awareness among the people about
Reliance Life Insurance, the response was very disappointing from
the point of view of the company. Out of 100 respondents not less
than 64 respondents did not have the knowledge that Reliance has
also come to the life insurance sector by overtaking the Australia
based life insurance company AMP SANMAR, while the rest 36
had knowledge of the acquisition of AMP SANMAR by Reliance.
IMPOPRTANT CRITERIA’S BEFORE TAKING AN LIFE
INSURANCE POLICY:
Now, let us see what criteria’s people consider most important
before taking a life insurance policy (the criteria’s for the study
have been mentioned before). Here, the most important criteria as
perceived by the people are being rated as 1 and the least
important criteria is being rated as 8, (as there are 8 criteria’s that
have been suggested under the research study). Here the number
of respondent is only 77, because those people who do not have
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
any life insurance policy have been excluded from the purview of
the study.
PREMIUM:PREMIUM
42 42.0 54.5 54.5
6 6.0 7.8 62.3
6 6.0 7.8 70.1
6 6.0 7.8 77.9
11 11.0 14.3 92.2
5 5.0 6.5 98.7
1 1.0 1.3 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
PREMIUM
PREMIUM
7654321
Fre
qu
en
cy
50
40
30
20
10
0
Now if we consider one of the criteria we can see that 54.5% of the
respondent has rated it as the most important thing that they consider
before taking any insurance policy from any company, while no body
has rated it as the least important criteria. So, it can be clearly
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
interpreted that premium that the policy holder has to pay to continue
his/her policy plays a very important role before selecting the terms
and conditions of the policy and also the company from which the
policy is to be taken.
CHARGES:CHARGES
6 6.0 7.8 7.8
7 7.0 9.1 16.9
17 17.0 22.1 39.0
20 20.0 26.0 64.9
12 12.0 15.6 80.5
9 9.0 11.7 92.2
3 3.0 3.9 96.1
3 3.0 3.9 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
CHARGES
CHARGES
87654321
Fre
qu
en
cy
30
20
10
0
Now if we consider the charges the customer has to pay to the
insurance company like Fund Management charges, administration
charges etc. most of the people consider it as a important criteria
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
which can dictate the terms before deciding on whether to take the
policy or not. But very few people (only 7.8% of the total
respondents), considers that it can be the most important criteria
before taking the decision on life insurance policy.
POLICY TERM:
policy term
policy term
87654321
Fre
qu
en
cy
20
10
0
The tenure of the policy i.e. the policy term depends on the policy
holder but sometimes the insurer can also influence the policy term
by giving some additional benefits on policies taken for a longer
period of time or vice versa. In the study that was conducted by us,
policy term
17 17.0 22.4 22.4
9 9.0 11.8 34.2
8 8.0 10.5 44.7
17 17.0 22.4 67.1
14 14.0 18.4 85.5
5 5.0 6.6 92.1
2 2.0 2.6 94.7
4 4.0 5.3 100.0
76 76.0 100.0
24 24.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
we found out that nearly 22% of the respondents thinks that policy
term offered by the company is the most important thing that one
should consider before taking any life insurance policy while 5.3% of
the respondents think that it is the least important thing that one
should consider before taking any life insurance policy.
RIDER BENEFITS:rider benefits
14 14.0 18.2 18.2
5 5.0 6.5 24.7
13 13.0 16.9 41.6
12 12.0 15.6 57.1
15 15.0 19.5 76.6
12 12.0 15.6 92.2
3 3.0 3.9 96.1
3 3.0 3.9 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
rider benefits
rider benefits
87654321
Fre
qu
en
cy
16
14
12
10
8
6
4
2
0
Rider benefits are the additional benefits that the insurer company
provides to its customers for attracting them. Things like accidental
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
benefit, critical illness benefit, and permanent disablement benefit are
provided as arider with the original policy with a payment of some
additional premium from the point of view of the customers.
According to the study nearly 18% of the respondents think that it is
the most important criteria before selecting an insurance policy, while
on the other hand 4% of the respondent feels it is the least important
criteria.
BONUS AND INTEREST PAID:BONUS
30 30.0 39.0 39.0
5 5.0 6.5 45.5
7 7.0 9.1 54.5
11 11.0 14.3 68.8
9 9.0 11.7 80.5
13 13.0 16.9 97.4
1 1.0 1.3 98.7
1 1.0 1.3 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
BONUS
BONUS
87654321
Fre
qu
en
cy
40
30
20
10
0
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
Bonus and interest are paid by the companies to the policy holder for
the policies which are with profit policy. I.e. if a person takes a with
profit policy, he/she also becomes liable to get a certain percentage
of the profit that the company makes in a certain financial year. 39%
of the respondent considers it as the most important criteria before
taking a life insurance policy.
SERVICES (PRE AND POST SALES):SERVICES
19 19.0 24.7 24.7
4 4.0 5.2 29.9
10 10.0 13.0 42.9
6 6.0 7.8 50.6
15 15.0 19.5 70.1
12 12.0 15.6 85.7
5 5.0 6.5 92.2
6 6.0 7.8 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
SERVICES
SERVICES
87654321
Fre
qu
en
cy
20
10
0
While conducting the study we have met many respondents who
things that many of the companies provide them satisfactory services
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
only till the policy is being taken by the respondent, but after that if
there is any requirement from the point of view of the customer, the
company does not pay the same attention to them as they had paid
earlier. So, nearly 25% of the respondents feel that services (both pre
and post sales) provided by the company is the most important thing
to consider before undertaking any kind of life insurance policy.
ACCESSIBILITY:accessibility
9 9.0 11.7 11.7
6 6.0 7.8 19.5
10 10.0 13.0 32.5
8 8.0 10.4 42.9
13 13.0 16.9 59.7
17 17.0 22.1 81.8
7 7.0 9.1 90.9
7 7.0 9.1 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
accessibility
accessibility
87654321
Fre
qu
en
cy
20
10
0
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
The term accessibility here refers to the easy availability of the
facilities that the company provides to its customer’s. The facilities
can be regarding information about the company and the various
products offered by them, which can be made available through
internet. According to the study nearly 12% of the respondent’s thing
it is the most important thing, while 9% of them feel that it is the least
important thing that one may consider before taking any life insurance
policy.
COMPANY IMAGE:company image
25 25.0 32.5 32.5
10 10.0 13.0 45.5
5 5.0 6.5 51.9
9 9.0 11.7 63.6
2 2.0 2.6 66.2
9 9.0 11.7 77.9
10 10.0 13.0 90.9
7 7.0 9.1 100.0
77 77.0 100.0
23 23.0
100 100.0
1
2
3
4
5
6
7
8
Total
Valid
SystemMissing
Total
Frequency Percent Valid PercentCumulative
Percent
company image
company image
87654321
Fre
qu
en
cy
30
20
10
0
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
Company image also plays an very important role in influencing the
decision of a prospective customer while taking the final decision.
From the study it has been found out that nearly 33% of the people
feel that it is the most important thing that influences ones decision
regarding taking of life insurance policy, while for 9% of people it
does not provide any significant importance in their decision making.
So, to conclude from the above representations, it can be said that
the premium that the policy holder has to pay for taking any life
insurance policy, plays the most important role in influencing their
decision, followed by the factors like bonus and interest paid by
the company, company image and so on. So, those companies
who are charging the least premium as well as providing all other
complementary services, has a better chance of succeeding in the
life insurance sector in comparison to other companies who are
also operating in the same field.
Now to further analyze the perception of the respondents about
what they think as the important criteria before taking an insurance
policy. I have taken two independent parameters, namely:
a) Age of the People.
b) Annual Income of the People.
After taking these two independent parameters, the analysis is being
made to see which age group people think what criteria is important
or what is difference in perception among the people who have
annual income which are significantly different from each other. The
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
number of respondents here is taken as 77 (76 in case of annual
income, as one of the respondents did not disclose his income) only
as those people who are not having any life insurance policy have
been excluded from the purview of the study..
AGE OF PEOPLE – CRITERIAS BEFORE TAKING AN LIFE
INSURANCE POLICY:
For conducting the study the ages of respondents are divided into
five categories, those are as follows:
a) Less than 30 years.
b) Between 31- 40 years.
c) Between 41 – 50 years.
d) Between 51 - 60 years.
e) More than 60 years.
i) Age Group – Premium:
PremiumAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
28 66.7%
37.1%
2 4.8%
37.1%
5 11.9%
1 2.4%
- -
31-40 yrs
26 100%
13 50%%
2 7.7%
3 11.5%
27.7%
2 7.7%
311.5%
1 3.8%
-
41-50 yrs
5 100%
- 120%
1 20%
1 20%
1 20%
1 20%
- -
51-60 yrs
3 100%
1 33.3%
- - - 266.7%
- - -
>60 yrs
1 100
- - - - 1 100%
- - -
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
%Total 77
100%
42 54.5%
67.8%
6 7.8%
6 7.8%
11 14.3%
5 6.5%
1 1.3%
Now, from the above representation we can see that nearly 67% of
the people who belong to the age group of less than 30 consider
premium as the most important criteria in comparison to only 50% of
the people who belong to an age group of 30-40. So, people who
have started their professional life consider more about the money
that have to spend on the insurance policy in comparison to the
people who are working for a relatively longer period of time. Again, if
we consider those people who have come to the end of their working
life, we can see that those people also thing that the expense
regarding the premium to be paid is the most important criteria for
them.
ii) Age Group – Charges:
ChargesAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
5 11.9%
49.5%
9 21.4%
10 23.8%
6 14.3%
5 11.9%
2 4.8%
1 2.4%
31-40 yrs
26 100%
1 3.8%
2 7.7%
6 23.1%
7 26.9%
5 19.2%
3 11.5%
1 3.8%
1 3.8%
41-50 yrs
5 100%
- - 1 20%
3 60% - - - 1 3.8%
51-60
3 100
- 1 33.3%
1 33.3%
- 1 33.3
- - -
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
yrs % %>60 yrs
1 100%
- - - - - 1 100%
- -
Total
77 100%
6 7.8%
7 9.1%
17 22.1%
20 26%
12 15.6%
9 11.7%
3 3.9%
3 3.9%
Now, if we consider the different charges (like Fund management
charges, administration charges etc.) that the companies take from
their policy holders, we can see that people who are having age less
than 30 years and those who belong to the group of 30 -40 years
think in the same way in this matter. They consider these charges
important, but not as much as they consider the cost relating to the
premium they have to pay to the company.
iii) Age Group – Policy Term:
Policy TermAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
8 19% 5 11.9%
3 7.1%
12 28.6%
9 21.4%
1 2.4% 1 2.4%
3 7.1%
31-40 yrs
26 100%
9 36% 3 12%
4 16%
3 12%
1 4%
1 4%
14%
1 4%
41-50 yrs
5 100%
- - 2 40%
- 2 40%
1 20% - -
51-60 yrs
3 100%
- 1 33.3%
- 1 33.3%
- 1 33.3%
- -
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
>60 yrs
1 100%
- - - - - 1 100%
- -
Total
77 100%
17 22.4%
9 11.8%
8 10.5%
17 22.4%
14 18.4%
5 6.6% 2 2.6%
4 5.3%
The policy term mainly depends on the wishes of the policy holder, so
here we can see that only 19% of the people whose age is below 30
years, think this is an important criteria, but people who are little bit
more experienced know that insurer companies sometime provide
extra benefits for longer policies in comparison to policies which have
a shorter span of life, that’s why nearly 36% of people belonging to
the age group of 31-40 years think that it is an very important criteria
which affects the decision regarding insurance.
iv) Age Group – Rider Benefits:
Rider BenefitsAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
7 16.7%
3 7.1%
11 26.2%
8 19%
5 11.9%
7 16.7%
- 1 2.4%
31-40 yrs
26 100%
5 19.2%
2 7.7%
2 7.7%
3 11.5%
9 34.6%
2 7.7%
2 7.7%
1 3.8%
41-50 yrs
5 100%
1 20%
- - - 1 20%
2 40%
- 1 20%
51-60 yrs
3 100%
1 33.3%
- - - - 1 33.3%
1 33.3%
-
>60 yrs
1 100%
- - - 1 100%
- - - -
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
Total 77 100%
14 8.2%
5 6.5%
13 16.9
12 15.6%
15 19.5%
12 15.6%
3 3.9%
3 3.9%
Out of 14 respondents who think that rider benefits is the most
important criteria in taking an decision regarding life insurance
policy, 7 belong to the age group of less than 30 and 5 belong to
the age group of 30 -40 years. So, most of them think that rider
benefits are not so important and it does not influence their
decision in a broad way.
v) Age Group – Bonus and Interest Paid:
Bonus and interest paidAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
17 40.5%
2 4.8%
4 9.5%
4 9.5%
8 19%
7 16.7%
- -
31-40 yrs
26 100%
10 38.5%
3 11.5%
2 7.7%
5 19.2%
1 3.8%
3 11.5%
1 3.8%
1 3.8%
41-50 yrs
5 100%
2 40% - 1 20%
- - 2 40%
- -
51-60 yrs
3 100%
1 33.3%
- - 1 33.3%
- 1 33.3%
- -
>60 yrs
1 100%
- - - 1 100%
- - - -
Tota 77 30 5 7 11 9 13 1 1 1.3%
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l 100% 39% 6.5% 9.1% 14.3%
11.7%
16.9%
1.3%
In this scenario we can see that the thinking of the people
belonging to different age group is quite similar, as nearly 40% of
the respondents belonging to three different age groups, namely:
<30, 30 – 40 and 40 – 50, think that it is the most important criteria
which influences the decision regarding life insurance policy and
only 1.3% of the total respondent think that it is the least important
criteria among all.
vi) Age Group – Services ( both pre and post sales):
Services (pre and post sales)Age grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
10 23.8%
3 7.1%
4 9.5%
4 9.5%
5 11.9%
9 21.4%
4 9.5%
3 7.1%
31-40 yrs
26 100%
8 30.8%
- 4 15.4%
- 8 30.8%
3 11.5%
1 3.8%
2 7.7%
41-50 yrs
5 100%
1 20%
- - 2 40%
2 40%
- - -
51-60 yrs
3 100%
- 133.3%
1 33.3%
- - - - 1 33.3%
>60 yrs
1 100%
- - 1 100%
- - - - -
Tota 77 19 4 10 6 15 12 5 6
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
l 100% 24.7% 5.2% 13% 7.8% 19.5%
15.6%
6.5% 7.8%
In this case, we can see that the people who belong to the age group
of less than 30 years and may be taking an life insurance policy for
the first time ( on their own), do not give much importance on services
in comparison to the people belonging to the age group of 30 – 40 ,
who put more emphasize on the services provided by the company,
the percentage is almost 31.
vii) Age Group – Accessibility:
AccessibilityAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
7 16.7%
2 4.8%
6 14.3%
6 14.3%
7 16.7%
4 9.5% 5 11.9%
5 11.9%
31-40 yrs
26 100%
2 7.7%
3 11.5%
1 3.8% 2 7.7%
4 15.4%
11 42.3%
2 7.7%
1 3.8%
41-50 yrs
5 100%
- 1 20%
1 20% - 2 40%
1 20%
- -
51-60 yrs
3 100%
- - 1 33.3%
- - 1 33.3% - 1 33.3%
>60 yrs
1 100%
- - 1 100%
- - - - -
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Total 77 100%
9 11.7%
6 7.8%
10 13%
8 10.4%
13 16.9%
17 22.1%
7 9.1%
7 9.1%
Here, we can see that not much importance is given to the
accessibility criteria by any group of respondents. Most of them
consider accessibility as an criteria which will not affect the decision
of a prospective customer, when he/she decides to take an life
insurance policy.
viii) Age Group – Company Image:
Company ImageAge grou
p.
total 1 2 3 4 5 6 7 8
<30 yrs
42 100%
10 23.8%
6 14.3%
3 7.1%
7 16.7%
1 2.4%
3 7.1%
6 14.3%
6 14.3%
31-40 yrs
26 100%
12 46.2%
3 11.5%
1 3.8%
1 3.8%
1 3.8%
3 11.5%
4 15.4%
1 3.8%
41-50 yrs
5 100%
2 40% - - - - 3 60%
- -
51-60 yrs
3 100%
- 1 33.3%
1 33.3%
1 33.3%
- - - -
>60 yrs
1 100%
1 100%
- - - - - - -
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Total
77 100%
25 32.5%
10 13%
5 6.5%
9 11.7%
2 2.6%
9 11.7%
10 13%
7 9.1%
In the case of company image also, we see a significant difference
between the opinions of respondents who belong to different age
groups. Only 24% of people belonging to the age group of less than
30 years think that it is very important and almost 14% think that it is
not at all important. On the other hand, nearly 46% of the people
belonging to the age group of 30 – 40 years think it is very important
and only 4% think that this criteria is not at all important. People
belonging to the age group of more than 60 years also consider
company image as the most important criteria.
So, to conclude it can be said that the thinking of people belonging to
different age group are quite different in most of the aspects whole it
comes to decide the important criteria regarding life insurance, it may
be due to the fact that they have started their career, so they worry
about the money they have to spend on insurance or it may be
related to the fact that for many of the newcomers it is the first time
that they are taking a life insurance policy on their own, so they do
not have experience when it comes to life insurance in comparison to
others who are having their own policy or those who are working for a
longer span of time and are quite settled in their respective area of
operation,
ANNUAL INCOME OF PEOPLE – CRITERIAS BEFORE TAKING
AN LIFE INSURANCE POLICY:
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For conducting the study the annual income of respondents is
divided into four categories, those are as follows:
a) Less than rs. 1 lakh.
b) Between rs 1.01 – 3 lakh.
c) Between rs. 3.01 – 5 lakh.
d) More than rs. 5 lakh.
Now, let us see the perception of people about the important
criteria’s before taking a life insurance policy who belong to
different income groups.
i) Annual Income – Premium:
PremiumAnnl. Inc(rs.)..
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
12 85.7%
- 1 7.1%
- 1 7.1%
- - -
1.01-3
lakh
18 100%
8 44.4%
3 16.7%
3 16.7%
1 5.6%
3 16.7%
- - -
3.01-5
lakh
16 100%
7 43.8%
1 6.3%
- 2 12.5%
4 25%
2 12.5%
- -
> 5 lakh
28 100%
14 50%
2 7.1% 2 7.1%
3 10.7%
3 10.7%
3 10.7%
1 3.6%
-
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
Total 76 100%
41 53.9%
67.9%
6 7.9%
6 7.9%
11 14.5%
5 6.6%
1 1.3%
-
In this scenario a clear difference in opinion can be seen, people
who have annual income of less than 1lakh, think premium to be
paid in a policy is the most important criteria ( nearly 86%), but as
the income increases, less importance is given on the premium
decreases. So, people having less income put more emphasize on
the money to be spent in comparison to people who have relatively
higher income.
ii) Annual Income – Charges:
ChargesAnnl. Inc(rs.)..
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
2 14.3%
2 14.3%
1 7.1%
3 21.4%
3 21.4%
2 14.3%
- 1 7.1%
1.01-3
lakh
18 100%
- 1 5.6%
6 33.3%
6 33.3%
3 16.7%
2 11.1%
- -
3.01-5
lakh
16 100%
1 6.3%
2 12.5%
4 25%
3 18.8%
1 6.3%
2 12.5%
2 2.5%
1 6.3%
> 5 28 3 1 6 8 5 3 1 1
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
lakh 100% 10.7%
3.6% 21.4%
28.6% 17.9% 10.7% 3.6% 3.6%
Total 76 100%
6 7.9%
67.9%
17 22.4%
20 26.3%
12 15.8%
9 11.8%
3 3.9%
3 3.9%
As the charges taken by the companies is very less as compared to
the premium they take, so here we can see that people pay less
importance on it. Bit, here also we can see that nearly 14% of the
people who are having annual income of less than 1 lakh, thing this is
the most important criteria, while on the other hand people who are
having income between 1.01 – 3 lakh, don’t thing at all that this is the
most important criteria. So, here also difference in income generates
difference in opinion.
iii) Annual Income – Policy Term:
Policy TermAnnl. Inc(rs.)..
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
4 28.6%
- - 4 28.6%
2 14.3%
1 7.1%
- 3 21.4%
1.01-3
lakh
18 100%
2 11.1%
1 5.6%
3 16.7%
6 33.3%
6 33.3%
- - -
3.01-5
lakh
16 100%
5 31.3%
1 6.3%
1 6.3%
4 25%
3 18.8%
1 6.3%
- 1 6.3%
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> 5 lakh
28 100%
6 22.2%
6 22.2%
4 14.8%
3 11.1%
3 11.1%
3 11.1%
2 7.4%
1 3.6%
Total 76 100%
17 22.7%
8 10.7%
8 10.7%
1722.7%
14 18.7%
5 6.7%
2 2.7%
5 6.7%
In case of policy term we can see that there is no such difference in
opinion among the people who belongs to different income groups.
As. 22.7% of the total respondents thinks it is the most important
criteria and on the other hand 22.7% of the respondents think it is
moderately important. The reason for the same can be that, people
who are having less income now, may have a feeling that as the time
goes on the income of them will increase, so they don’t put so much
emphasis on policy term as compared to the other criteria’s.
iv) Annual Income – Rider Benefits:
Rider BenefitsAnnl. Inc(rs.)..
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
2 14.3%
17.1%
5 35.7%
2 14.3%
1 7.1%
2 14.3%
- 1 7.1%
1.01-3
lakh
18 100%
4 22.2%
1 5.6%
3 16.7%
1 5.6%
6 33.3%
3 16.7%
- -
3.01-5
16 100%
4 25% 2 12.5%
1 6.3%
3 18.8%
1 6.3%
4 25%
- 1 6.3%
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
lakh> 5 lakh
28 100%
4 14.3%
1 3.6%
4 14.3%
5 17.9%
7 25%
3 10.7%
3 10.7%
1 3.6%
Total 76 100%
14 18.4%
56.6%
13 17.1%
11 14.5%
15 19.7%
12 15.8%
3 3.9%
3 3.9%
Here, we can see that people who are having relatively greater
income think that rider benefits are very important criteria in
comparison to people who are having less income. The reason for
the same may be as the income of a person increase he/ she will be
liable to get more rider benefits in comparison to people who are
having lesser income, so they put less importance on rider benefits.
But, one thing is clear very few people (3.9% of the total respondents)
from all income class think that rider benefits do not carry any
importance.
v) Annual Income – Bonus and Interest Paid:
Bonus and interest paidAnnl. Inc.(rs)..
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
5 35.7%
- 1 7.1%
2 14.3%
1 7.1%
5 35.7%
- -
1.01-3
lakh
18 100%
8 44.4%
2 11.1%
2 11,1%
2 11.1%
3 16.7%
1 5.6%
- -
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
3.01-5
lakh
16 100%
8 50%
- 1 6.3%
2 12.5%
2 12.5%
2 12.5%
- 1 6.3%
> 5 lakh
28 100%
9 32.1%
2 7.1%
3 10.7%
5 17.9%
3 10.7%
5 17.9%
1 3.6%
-
Total 76 100%
30 39.5%
4 5.3%
7 9.2%
11 4.5%
9 11.8%
13 17.1%
1 1.3%
1 1.3%
In case of bonus and interest paid by the insurer company, we can
see that people who belong to the income groups of 1.01 – 3 lakh
and 3.01 – 5 lakh puts more emphasis on this, in comparison to the
people who have income less than 1 lakh or those who are having
income of more than 5 lakh. The reason for the same may be due to
the fact, that people who belong to the range of 1- 5 lakh as annual
income, have an tendency to earn more than what they are earning
and that’s why they thing it as important criteria, on the other hand
people who have income less than 1 lakh, does not have such
income to invest in the company ( more emphasis is given by them
on the safety of the money) and those who are having income of
more than 5 lakh, does not crave for more money and that is why
they don’t put so much importance on bonus and interest paid by the
company.
vi) Annual Income – Services ( Both pre and post sales):
Services (pre and post sales)Annl. Inc(rs.)..
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
2 14.3
17.1%
2 14.3%
2 14.3%
2 14.3%0
1 7.1% 2 14.3%
2 14.3%
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
%1.01-
3 lakh
18 100%
5 27.8%
- 2 11.1%
1 5.6%
4 22.2% 6 33.3% - -
3.01-5
lakh
16 100%
4 25%
- 5 31.3%
- 3 18.8% 4 25%
- -
> 5 lakh
28 100%
7 25%
3 10.7%
1 3.6%
3 10.7%
6 21.4% 1 3.6% 3 10.7%
4 14.3%
Total 76 100%
18 23.7%
45.3%
10 13.2%
6 7.9%
15 19.7%
12 15.8%
5 6.6%
6 7.9%
Now if we consider the services provided by the company we can
see that the people who are having less income put less emphasis
on this criteria (14.3%) and on the other hand people having
income of more than 1 lakh put more emphasis on this criteria ( on
an average 26%), the reason may be due to the fact people who
are earning more have more job responsibilities, so they have to
depend on the services provided by the company personnel when
compared to others.
vii) Annual Income – Accessibility:
AccessibilityAnnl. Inc
.(rs).
total 1 2 3 4 5 6 7 8
< 1 lakh
14 100%
3 21.4%
- 3 21.4%
2 14.3%
2 14.3%
0
2 14.3%
1 7.1%
1 7.1%
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1.01-3 lakh
18 100%
3 16.7%
- 3 16.7%
1 5.6%
4 22.2%
3 16.7%
3 16.7%
1 5.6%
3.01-5 lakh
16 100%
1 6.3%
2 12.5%
1 6.3%
4 25%
1 6.3%
3 18.8%
- 4 25%
> 5 lakh
28 100%
2 7.1%
4 14.3%
2 7.1%
1 3.6%
6 21.4%
9 32.1%
3 10.7%
1 3.6%
Total 76 100%
9 11.8%
6 7.9%
9 11.8%
8 10.5%
13 17.1%
17 22.4%
7 9.2%
7 9.2%
If we consider the accessibility as one of the criteria for taking
insurance policy, we can see that as the income of the person
increases , they put less importance on the accessibility criteria
( 21.4% of people having income less than 1 lakh, 16.7% for 1.01 – 3
lakh, 6.3% for 3.01 – 5 lakh and 7.1% for more than 5 lakh). But the
same trend can not be seen when they consider it as the least
important criteria in taking a decision regarding life insurance. So,
most of the people thing it, as a criteria which is not so important
while taking their decision (22.4% of the total respondents).
viii) Annual Income – Company Image:
Company ImageAnnl. Inc.(rs).
total 1 2 3 4 5 6 7 8
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
< 1 lakh
14 100%
5 35.7%
2 14.3%
2 14.3%
2 14.3%
- 1 7.1%
17.1%
1 7.1%
1.01-3
lakh
18 100%
5 27.8%
3 16.7%
1 5.6%
1 5.6%
1 5.6%
4 22.2%
1 5.6%
2 11.1%
3.01-5
lakh
16 100%
7 43.8%
2 12.5%
- - - 2 12.5%
4 25%
1 6.3%
> 5 lakh
28 100%
8 28.6%
3 10.7%
2 7.1%
5 17.9%
1 3.6%
2 7.1%
4 14.3%
3 10.7%
Total 76 100%
25 32.9%
10 13.2%
5 6.6%
8 10.5%
2 2.6%
9 11.8%
1013.2%
79.2%
Here, also a fluctuating trend can be seen in which people who are
having income less than 1 lakh and people who are having income of
3.01 – 5 lakh are putting more emphasis on company image in
comparison to others. The reason for the same may be people who
have less income want to see their money in a secured hand, so they
consider the company profile before taking any life insurance policy.
So, to conclude it can be said that in most of the aspects the opinion
of the people belonging to different income groups differ from each
other. The reason for the same can be the importance that they give
on the sum they invest in taking a life insurance policy I.e. a person
who is having income of less than 1 lakh will put more emphasis on a
sum of rs, 10000, in comparison to a person who is having an income
of more than 5 lakh. So, the difference in income does show
difference in opinion also.
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5. CONCLUSION:
The conclusions that can be drawn from the survey that was
conducted by us can be summarized in the following way:
a) Insurance is the most preferred investment alternative which is
available to people followed by alternatives such as Mutual
Fund, PPF, Real Estate etc.
b) Only 36% of the total respondents are aware of the fact that
Reliance has recently come into the Life insurance sector.
Those people who are aware of the fact that Reliance has
come into the life insurance sector are willing to invest in
Reliance because of the brand name and growth potential that
reliance has.
c) According to the survey Premium to be paid for taking an life
insurance policy is the most important criteria which people
consider before taking an life insurance policy followed by
factors like Bonus and Interest paid by the company, Company
Image etc.
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d) People who belong to different age groups have different
perception regarding the most important criteria before taking
the decision on a life insurance policy.
e) People who belong to different income groups also have
different perception regarding the important criteria’s concerned
with the life insurance.
LIMITATIONS OF THE RESEARCH
The following limitations can be pointed out from the research that I
conducted in relation to the problems that were given to me by
Reliance Life Insurance Company Limited:
a) The sample size chosen for the questionnaire was only
100 and that may not represent the true picture of the
consumer perception about the Life Insurance sector.
b) The research got confined to the city of Bangalore and
there also it was conducted in places like Reliance Web
World. So, the respondent only belong to a particular
group who only go to places like Reliance web world and
could not get the responses of people who do not go to
places like that.
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c) Nearly 90% of the respondent belonged to the age group
of 20-50 years and only 10% were above 50 years old.
So, in collecting the responses the opinion of the
experience and aged people were not available. So, the
findings may not be correct when we think about the
opinion of the elderly people about the life insurance.
d) The people who were selected for the questionnaire was
done on the basis of simple random sampling, so, there
were certain cases in which the person selected did not
have any life insurance policy, so he could not gibe any
positive feedback regarding the important criteria to be
considered before taking an life insurance policy. So, this
further reduced the actual number of respondents to 75
from 100.
e) For conducting the comparative analysis I had to depend
mostly on secondary data about the company products as
primary data about the same was not available. The
problem pf this is that many useful information about the
products is not readily available in sources like internet,
so it made the job of comparison a little bit difficult for me.
f) The plan offered by different companies had different
options in them, so at times the comparison became very
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
difficult. The parameters for the comparison were also
different in the selected companies.
g) As Reliance has just entered the Life Insurance sector, it
did not have any financial statement so far, so no analysis
could be done on the basis of financial statements
between the companies as well as of Reliance life.
h) One of the important criteria that were selected by the
respondents which they consider before taking an
insurance policy was ‘Company Image’, but there were no
parameters available to compare criteria’s like this
between the companies.
i) The changes that have come into the ULIP products
recently were not taken into consideration for the
comparative study.
j) The products for comparison was also only four, due to
lack of information as well as time constrain.
LEARNING OUTCOME:
In this time span of eight (8) weeks, many aspects have come to my
knowledge both from the perspective of academic as well as
corporate world. Those aspects of my learning can be summarized in
the following way:
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
a) Initially we had a training of 8 days, which was helpful in giving
a broader perspective of the total life insurance scenario
prevailing in India, which was helpful in conducting the study. It
explained all the pros and cons about the insurance industry
and the different practices followed by insurance companies.
Some aspects of Insurance like Premium Calculation. Unit
calculation was explained to us.
b) The comparative analysis part helped to know about the
different products offered by different companies as well as the
different benefits that they are offering with their respective
products.
c) Then I came to know about the operations that go on in an
organization in the daily routine. It helped us to prepare our self
for the future when we have to join a organization and work
under similar conditions.
d) The concept of ULIP which was not known to me was explained
briefly as well as the difference between ULIP and Mutual Fund
was also made clear.
e) The skill of how to approach a person for convincing him/her to
do a particular thing was learned by us at the time of filling up
the questionnaire.
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So, finally it can be said that although my intended specialization is
Finance, this internship gave me the opportunity to learn the various
aspects of Marketing which can help me in the future as when I enter
the corporate world, I should be able to handle any job that is being
offered to me by the company in which I am doing my job. So, from
that point of view it was a great learning experience for me to know
the various aspects of customer handling that are being adapted by
modern business houses as well as to have the knowledge about the
total Insurance sector which is an integral part of the total finance
industry in this little time span. This will help me immensely in the
future as Insurance sector is growing at a rapid speed and there will
be lots of job opportunities in this sector in the future time to come.
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8.0 ANNEXURE
Consumer Perception about Life Insurance
Questionnaire
Dear respondent, This questionnaire is aimed at understanding your perception about life insurance .Your response will be dealt with strict confidentiality and it will be used only for academic purpose. Thank you for spending your valuable time to fill this questionnaire.
1. Name: Gender: Male Female
Contact No:
2. Age Group:
3. Educational Qualification:
4. Profession:
Under Graduate
41-50
Above 60
Below 30 31-40
Post Graduate
Others (Specify)………….
Graduate
Student Self-Employed
Others (Specify)………….
Employed
51-60
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
5. Annual Income:
6. What percentage of your Salary do you usually save?
7. What kind of investment do you prefer?
8. What are your various investment alternatives?
9. State your preference among the following investment alternatives and Rate them on a 6 Point Scale. ( 6 – Most important, 5- Very important, 4- Quite important,
3- important, 2- Less important, 1- Least important )
10.Do you have life Insurance Policy? ( If ‘NO’ then please go to question no. 14)
11.If ‘Yes’ Which Insurance Company Policy do you have?
Below 1 Lakh 3.01-5 Lakh
Above 5 Lakh
1.01-3 Lakh
Less Than 15% 20-25%
Greater Than 25%
15-20%
Short Term BothLong Term
Bonds & Debentures
Post Office Scheme
PPF
Equity/Shares Bank DepositsInsuranceMutual Fund Gold & SilverReal Estate
Others (Specify)…………….
Safety LiquidityCapital GrowthReturn Company Profile & Brand NameTax Benefit
Yes No
LIC Birla Sun lifeBajaj AllianzICICI Prudential
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
12.What kind of Insurance Policy have you taken?
13.What parameters do you look into before you take up a life insurance Policy? Please rank them between 1-8. (1-most important, 8-Least important)
14.Are you aware about the take over of AMP SANMAR by Reliance Group to form Reliance Life Insurance in October 2005?
15.Would you like to invest in Reliance Life Insurance?
16.If, ‘YES’ what will make you to invest in Reliance Life Insurance?
17. Among the following Life Insurance Companies in which company you will be Willing to take a life insurance?
Others (Specify)……..HDFC Standard
Term Insurance Money BackEndowmentChild Plan Market Return Plan
(ULIP)Annuity/Pension
Premium Policy TermChargesRider Benefits Services (Pre & Post Sales)Bonus &
Interest Paid
Accessibility Company
Yes No
Yes No
Brand image Diversity
Transparency Utmost Good Faith
Growth Potential
Others (Specify)……….
Others (Specify)…………….
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BIBLIOGRAPHY:
WEBSITES:
1) www.irda.org
2) www.relianceadagroup.com
3) www.reliancecapital.com
4) www.reliancelife.co.in
5) www.bimaonline.com
6) www.iciciprulife.com
7) www.hdfcinsurance.com
8) www.birlasunlife.com
9) www.allianzbajaj.com
10) www.site.securities.com
11) www.anandrathi.com
12) www.indiainfoonline.com
Bajaj Allianz Birla SunlifeHDFC Standard LifeSBI Life TATA- AIGICICI Prudential
Reliance Max NewyorkMet Life
Sahara ING Vysya Aviva Dabur
OM- Kotak Mahindra
Shriram
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A PROJECT REPORT ON RELIANCE LIFE INSURANCE
BOOKS:
1) Life Insurance (IC-33) published by Insurance Institute of India.