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RIMT-Maharaja Aggrasen Engineering College


Mandi Gobindgarh

ACKNOWLEDGEMENT

The success of this final report is the outcome of Guidance and valuable
suggestions provided by all the concerned without whom the report could not fide
on the right back.
I would like to express my sincere gratitude to Lect. Mrs. Paramjeet kaur, MBA
Dept.,RIMT-MAEC for giving me an opportunity to do this project work.
I also express my sense of deep gratitude towards PUNJAB TECHNICAL
UNIVERSITY JALANDHAR for introducing a programme which enables us to
learn more.

Finally, I will be failing in my duty, if I do not thank my parents, friends and


well wishers for their enthusiastic support and who have directly or indirectly
helped in some way or the other in making this final report a success.

Table of Content
1. Main Text
1.1 Executive Summary
5
1.2 Introduction
Introduction ....6
Objectives....8
Limitations..10
2. Finding & Results

Industry profile...11
Company profile....14
Company products.18
SWOT Analysis.....21
Research methodology...22
Advantage of life insurance...27

Conclusion.30

3. Appendices ...31
4. Bibliography..34

Executive Summary

Management Thesis is a part of the MBA Program. The objective of a


Management Thesis is to train the student in designing and implementing a research
project in respect of a business problem. A Management Thesis is the culmination
of training provided to the student on practical applicability of the theoretical
concepts learned by them.
In this study we look at the options of experiential learning and embedding to
the skills and how the organization get the accreditation from its training course and
develop the employee exactly and smartly using applying different models like 360 o
feedback, training by telephone, group training, mind mapping, perceptual
awareness etc.
Training is essential to order to understand how to implement the core
principle of coaching and learning. Most of the people attracted up to the profession
or precisely the once who are likely to make good trainers. People with integrity
like helping other and enjoy making different others. Experiential learning and
embedding skills is an action oriented behavioral situation. The purpose of the
action situation is to have participants generate their own data about each of the key
concepts to be studied.
To get the best from experiential learning and embedding skills method, the
trainer must be a good observer of behavior. When the groups start to examine its
experiences and reflect upon them, he is in a position to assist with this process. His
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responsibilities in focusing learning, and making it clearer for each participant, are
extremely important.

INTRODUCATION
Insurance is an upcoming sector, in India the year 2000 was a landmark
year for life insurance industry, in this year the life insurance industry was
liberalized after more than fifty years.
Insurance sector was once a monopoly, with LIC as the only company, a
public sector enterprise. But nowadays the market opened up and there are many
private players competing in the market. There are fifteen private life insurance
companies has entered the industry.
After the entry of these private players, the market share of LIC has been
considerably reduced. In the last five years the private players is able to expand the
market (growing at 30% per annum) and also has improved their market share to
18%.
For the past five years private players have launched many innovations in
the industry in terms of products, market channels and advertisement of products,
agent training and customer services etc.

The various life insurers entered India:1. HDFC Standard Life Insurance Company Ltd.

2. Max New York Life Insurance Co. Ltd.


3. ICICI Prudential Life Insurance Company Ltd.
4. Kotak Mahindra Old Mutual Life Insurance Limited.
5. Birla Sun Life Insurance Company Ltd.
6. Tata AIG Life Insurance Company Ltd.
7. SBI Life Insurance Company Limited.
8. ING Vysya Life Insurance Company Private Limited.
9. Met life India Insurance Company Ltd.
10. Royal Sundaram Life Insurance Company Limited.
11. Aviva Life Insurance Co. India Pvt. Ltd.
12. Sahara India Insurance Company Ltd.
13. Shriram Life Insurance Company
14. Life Insurance Corporation of India.
15. Reliance Life Insurance Company Limited.
16. Bharti AXA Life Insurance Company Limited.
Through this project I want to study about the life insurance industry and also doing
the comparative analysis between two insurance players in this industry. They are,
ICICI Prudential Life Insurance
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Life insurance corporation of India

OBJECTIVES
The entry of foreign MNCs and the conductive business environment
fostered by the government, it is no wonder that the re-entry of private insurance
has marked a second coming for the sector. In just five years, the sector has
undergone a makeover, offering more choice, better services, quicker settlement,
tighter regulation and greater awareness s the environment become more and more
competitive and services and products become alike, creating a differentiation is
becoming extremely tough.
Thus, this project objectives is as follows
.
To know where Reliance life insurance Company limited & life insurance
Corporation of India companies stands in the market.
Find out the strength and the weakness of their plans.
And making comparative analysis between the products of Reliance life
insurance Company limited with Life insurance Corporation of India.

Scope of the study:


This study can be conducted by comparing the performances & products of
three private & government insurance players in insurance industry.
The number of respondents to be surveyed can be improved.
The study can be conducted in Bangalore city only.
This study can be conducted to analyze the market stand of Reliance life
insurance Company limited and Life insurance Corporation of India
insurance companies.

LIMITATIONS
Thought the present study aims to achieve the above mentioned objectives in
full earnest and accuracy, it may be hampered due to certain limitations, some of the
limitations of this study may be summarized as follows,
This study is limited to two private insurance companies only. (Reliance life
insurance company limited & Life insurance corporation of India)
This study is limited to Bangalore city only.
And getting accurate responses from the respondents due to their inherent
problems. They may be refusing to co-operate.
Respondents may have to be contacted repeatedly or alternate respondent
may have to be identified.
For want of time is restricted.

Finding & Results


INDUSTRY PROFILE

Insurance is a contract between two parties whereby one party called


insurer undertakes in exchange for a fixed amount of money on the happening of a
certain event.

Insurance is a protection against financial loss arising on the

happening of an unexpected event. The primary purpose of Life Insurance is the


protection of the family. Insurance in it's various forms protects against such
misfortunes by having the losses of the unfortunate few paid by the contribution of
the many who are exposed to the same risk. This is the essence of insurance- the
sharing of losses and substitution of certainty for uncertainty. Insurance companies
collect premiums to provide for this protection. A loss is paid out of the premiums
collected from the insuring public and the insurance companies act as trustees of the
amount collected. In is a system by which the losses suffered by a few are spread
over many, exposed to similar risks.
In the western world, life insurance evolved mainly from the maritime
industry. Started by private financiers who used to gamble on the lives of seafarers
by offering five times the money deposited with them in case of certain
contingencies?
In its present form, life insurance has its origin in England and made its debit
in India in the year 1818.Initially, Indians were not considered on par with
Europeans as far as their insurability was concerned. There were also many other
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failures. It was in the early part of the 20 th century that some kind of legislation was
made to regulate the industry. From then on life insurance made great strides in the
country.
At the time of independence and thereafter, there were more than 200
companies operating in India and not all of them on sound ethical principles. Many
factors combined together to prompt the then government to nationalize the life
insurance industry in 1956 to form the Life Insurance Corporation of India.
The years from 1956 to 1999 saw the life insurance corporation of India
emerge as a giant financial institution and the lone organization purveying life
insurance, if we ignore the minimal presence of postal life insurance. The institution
succeeded in penetrating in many areas and segments of the population and in
garnering public money for public welfare.
It was in the 1990s that the winds of change started sweeping over India and
brought in their wake many changes in the economy. Liberalization ensured
competition in many fields and there was a clamor that the insurance industry too is
opened up to Private Indian and foreign players to provide the customer with a
choice.
The Malhotra committee, appointed in 1993 was given the mandate to study
the industry and to suggest the changes that were necessary to make it modern and
in tune with peoples aspirations. The report submitted by the committee was the
precursor of the IRDA Bill.

11

By the passing of the IRDA Bill, the Insurance sector has been opened up for
the private companies to carry on insurance business. Now the life insurance
industry in India is rapidly evolving and growing. It has witnessed a big growth as
many Indian and foreign were entered in to the Indian insurance sector. The life
insurance industry in India has become fiercely competitive with the entry of
several new players including major multinational insurers after the deregulation of
the sector. It has opened up a range of untapped opportunities for new entrants into
the industry, as the potential market for buyers is high since the emerging market in
India has a low insurance penetration and high growth rates.

12

COMPANY PROFILE

ICICI Prudential Life Insurance

Overview
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank one of India's foremost financial services companies-and Prudential plc - a leading
international financial services group headquartered in the United Kingdom. Total
capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of
74% and Prudential plc holding 26%.
We began our operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). Today, our nation-wide
team comprises of over 2100 branches (inclusive of 1,116 micro-offices), over
290,000 advisors; and 18 bancassurance partners.
ICICI Prudential is the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a
row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer,
by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted
Brands'. As we grow our distribution, product range and customer base, we
continue to tirelessly uphold our commitment to deliver world-class financial
solutions to customers all over India.
13

Our vision:
To be the dominant Life, Health and Pensions player built on trust by world-class
people and service.
This we hope to achieve by:

Understanding the needs of customers and offering them superior products


and service

Leveraging technology to service customers quickly, efficiently and


conveniently

Developing and implementing superior risk management and investment


strategies to offer sustainable and stable returns to our policyholders

Providing an enabling environment to foster growth and learning for our


employees

And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5


core values -- Integrity, Customer First, Boundaryless, Ownership and Passion.
Each of the values describe what the company stands for, the qualities of our
people and the way we work.
We do believe that we are on the threshold of an exciting new opportunity, where
we can play a significant role in redefining and reshaping the sector. Given the
quality of our parentage and the commitment of our team, there are no limits to
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our growth.
Our values :
Every member of the ICICI Prudential team is committed to 5 core values:
Integrity, Customer First, Boundaryless, Ownership, and Passion. These values
shine forth in all we do, and have become the keystones of our success.

Management Profile:
Board of Director
The ICICI Prudential Life Insurance Company Limited Board comprises reputed
people from the finance industry both from India and abroad.

Mr. K.V. Kamath, Chairman


Ms. Chanda Kochhar, Director
Mr. Barry Stowe, Director
Mr. Adrian OConnor, Director
Prof. Marti G. Subrahmanyam, Director
Mr. Mahesh Prasad Modi, Director
Ms. Rama Bijapurkar, Director
Mr. Keki Dadiseth, Director
Ms. Shikha Sharma, Managing Director
Mr. N.S. Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive Director

15

Management Team
The ICICI Prudential Life Insurance Company Limited Management team
comprises reputed people from the finance industry both from India and abroad.
Ms. Shikha Sharma, Managing Director & CEO
Mr. N. S. Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive Director
Ms. Anita Pai, Executive Vice President Customer Service & Technology
Dr. Avijit Chatterjee, Appointed Actuary
Mr. Puneet Nanda, Executive Vice President & Chief Investment Officer

16

Life insurance Corporation of India


LIC of India is one of Indias leading financial institutions, offering complete
financial solutions that encompass every sphere of life. From commercial banking
to stock broking to mutual funds to life insurance to investment banking, the group
caters to the financials needs of individuals and corporate.
The LIC has a net of over Rs. 1,800 crore and employs over 7,500 employees
in its various businesses. With a presence in 82cities in India and it services a
customer base of over 20,00,000.

Date of Establishment

1 Sep. 1956

Address
1st Floor,West Wing, Mumbai Do-Iv, Yogakshema, Jeevan Bima Marg, Mumbai - 400 021, India

Branches 8 Zonal Offices and 101 Divisional Offices


Management Team
T.S. Vijayan - Chairman
D.K. Mehrotra - MD, LIC
Thomas Mathew T - MD, LIC
A K Dasgupta - MD, LIC
Arun Ramanathan - Secretary, Financial Services, Dept. of Financial Services, Ministry of
Finance, Govt of India
Sindhushree Khullar - Addl. Secretary, Dept of Economic Affairs, Ministry of Finance
Yogesh Lohiya - Chairman cum MD, GIC of India
T.C. Venkat Subramanian - Chairman & MD, Export Import Bank of India.

17

Overview
The largest life insurance company in India, Life Insurance Corporation is fully owned by the
government. It provides individual life insurance, group insurance and pension plans. Its
subsidiaries include Life Insurance Corporation of India International, LIC Nepal, LIC Lanka,
LIC Housing Finance and LICHFL Care Homes. It has over 12 million policy holders and over 9
lakh agents. It has underwritten more than 120 million policies.
LIC saw computers in 1964. Today the company is on the Internet and is utilizing Information
Technology in servicing its clients. It has bagged various award including Loyalty Awards 2008 in
Insurance Sector, NDTV Profit Business Leadership Award 2007, CNBC Awaaz Consumer
Awards 2007 and Outlook Money NDTV Profit Awards 2007.
LIC provides a rewarding career as sales agents. It offers world class training, freedom to work
and unmatched financial strength.

18

COMPANY PRODUCT
Product Details of ICICI Prudential Life Insurance Products: Life Time Gold
Premium Life Gold
Life Stage Pension
Life Time Super Pension
Hospital Care
Life Link Super
Premier Life Pension
ICICI Pru______ + MediAssure
Invest Shield Life

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Product of Life Insurance Corporation of India


Children's Policy
Komal Jeevan - Plan No. 159
Children Deferred - Plan no.41
Jeevan Kishore - Plan no.102
Jeevan Chhaya - Plan no.103
Marriage Endowment/Educational Annuity - Plan No. 90
Jeevan Anurag - Plan no.168
Endowment Policy
Endowment with Profits - Plan no.14
Limited Payment Endowment with Profits - Plan no.48
Jeevan Mitra - Plan no.88
New JanaRaksha Policy - Plan no.91
Jeevan Anand Plan no. 149
Jeevan Mitra Triple Cover - Plan no.133
Group Insurance Policy
Janashree Bima Yojana
Group Insurance Scheme in lieu of EDLI
Group (Term) Insurance Scheme
Group Savings Linked Insurance Scheme
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Group Superannuation Scheme


Group Mortgage Redemption Assurance Scheme
Shiksha Sahayog Yojana
Joint Life Policy
Jeevan Saathi - Plan no.89
Money Back Policy
Money Back with Profit - Plan no.75
New Money Back - Plan no.93
Jeevan Surabhi 15 yrs - Plan no.106
Jeevan Surabhi 20 yrs - Plan no.107
Jeevan Surabhi 25 yrs - Plan no.108
Jeevan Bharati Plan No 160
Jeevan Samriddhi Plan No 154, 155, 156 157
Bima Bachat- Plan no.175
Pension Plans or Annuities
New Jeevan Dhara - Plan no.148
New Jeevan Suraksha Plan no. 147
Jeevan Akshay II Plan no. 163
Jeevan Nidhi Plan no. 169
Jeevan Akshay V Plan no. 183
Special Plans

21

Term Assurance - Plan no.43


Mortgage Redemption - Plan no.52
Jeevan Aadhar - Plan no.114
Market Plus - Plan No 181
Jeevan Vishwas Plan No. 136
Jeevan Saral Plan No. 165
Jeevan Pramukh Plan No. 167
Bima Nivesh 2005 Plan No 171
Money Plus-Plan No 180
Term Policy
Convertible Term Assurance - Plan no.58
New Bima Kiran
Term Assurance
Anmol Jeevan I Plan No- 164
Amulya Jeevan-Plan No-177

Whole Life Policy


Whole Life with Profits - Plan no.2
Limited Payment Whole Life with Profits - Plan no.5
Single Premium Whole Life - Plan no.8
Jeevan Tarang- Plan no.178

22

PENSION PLAN PRODUCTS OF LIC INDIA & ITS FEATURES


LIC of India retirement income plan
LIC of India retirement income plan (unit linked)
What is the LIC of India retirement income plan?
The LIC of India retirement Income plan is a saving plan designed to meet your
post retirement needs. It is a plan that gives you jeene ki azaadi . It gives you the
choice to remain independent even after retirement.
The LIC of India retirement income plan is a participating plan. The plan comes in
two forms:
One with cover and one without cover
Who can avail of the LIC of India retirement income plan?
How old do you have to be to avail of this plan?
Minimum age -18 years
Maximum age 60 years
For what term can choose to pay the premiums?
5 years 30 years

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At what intervals can you pay premiums?


Quarterly
Half yearly
Annually
What are the advantages of this plan?

You can choose to retire at any age between 45 years and 65 years.
On retirement:
Annuity option:
Early retirement benefits:

Other products are:

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Money plus
Auto plus
Child plan
Health plan

SWOT ANALYSIS
Strengths:
a.
b.
c.
d.
e.
f.

Dedicated Employees.
Well Efficient Management.
Technology.
Diversification of funds.
Strong and popular brand name.
Adaptability to changes.

Weakness:
a. Lack of good services.
b. Lack of awareness about insurance among people.
c. Less coverage in Rural Areas.

Opportunities:
a.
b.
c.
d.

Fast growing economy.


Increasing per capita income in India.
Saving behavior.
High growth of ULIP industry.

Threats:
a. Arrival of new entrants in the insurance industry.
b. Cut throat competition within the industry

Observations
RESEARCH METHODOLOGY

25

TYPE OF RESEARCH

The research includes different options. They are:

Exploratory research:
It is usually a small-scale study undertaken to define the exact nature of a
problem and to gain a better understanding of the environment within which the
problem has occurred. It is the initial research, before more conclusive research is
under taken.

Descriptive research:
It is to provide an accurate picture of some aspects of market environment.
Descriptive research is used when the objective is to provide a systematic
description that is as factual and accurate as possible. It provides the number of time
something occurs, or frequency, lends itself to satisfied calculations such as
determining average number of occurrences.

Casual research:

26

If the objective is too determined which variable might be causing a certain


behavior that is whether there is a cause and effect relationship between variable,
casual research must be undertaken. In order to determine causality, it is important
to hold the variable that is assumed to cause the change in the other variable
constant and than measure the changes in the variable. This type of research is very
complex and the researcher can never be completely certain that there are no other
factors influencing the casual relationship, especially when dealing with peoples
attitudes and motivation.
This research is about understanding the market stand and also find the
strength & weakness of the products of three insurance companies by making
comparing analysis of the products of the companies, mainly descriptive research
methodology are adopted. Descriptive research was adopted since it provides
accurate picture about some aspect of market environment such as which brand is
performing well and what the company can do to improve its market share.

SAMPLING PROCEDURE

27

How should the respondents be chosen? To obtain a representative sample and nonprobability sample can be drawn, they are

Judgment sample:
The researcher selects population numbers who are good prospects for
accurate information.
For collection of research data judgment-sampling technique is used where
all of them are employees of the three insurance companies as they are good
prospect for accurate information.

ACTUAL COLLECTION OF DATA


Data sources:
The sources of data include either secondary data or primary data and even some
times the combination of both. The present study is more concentration on both
primary and secondary data.

Primary data:
Primary data is collected through face-to face interaction with employees of
the insurance companies, by meeting them in personal.

Secondary data:

28

The secondary data used for their study are inclusive of the data
collected from the internet, catalogues and brochures and magazines.

METHODOLOGY
The study will conduct on the bases of survey through questionnaires given
to respondents.

Sampling Design
Population: Ludhiana
Sample Size: Population of 100
Sample Technique: Convenience Sampling
Statistical Tools: Correlation.

29

ADVANTAGES OF LIFE INSURANCE


Protection against risk of untimely death
Life insurance is a product, which offers protection against the risk of death
the full sum assured is made available under a life assurance policy, whereas under
other savings schemes, the total accumulated savings alone will be available.

Protection during old age


Life insurance can also be used as a means of saving for ones future.
There are a number of life insurance policies, which in addition to life cover also
provide the means of investing ones income. The sum as per the policy will be
received only after a period of time. This amount thus provides for the old age.

Forced savings
Payment of life insurance premiums is compulsory and becomes a habit.
Savings in other scheme can be easily withdrawn and may be used for less worthy
purpose. Termination of a life insurance policy by the policyholder usually results
in substantial loss in benefits under the policy to the policyholder. One is thus
encouraged to save and keep ones policy alive.

Educational requirements and charity


30

The object of insurance may be to serve as a security to educational


funds in respect of loans advanced for educational purpose or to provide donations
to charitable institutions like hospital and school.

Nomination and assignment


The life insured can name the person or persons to whom the policy
money would be payable in the event of his death .the proceeds of a life insurance
policy can be protected against the claims of the creditors of the life insured by
effecting a valid assignment of the policy. The beneficiaries are fully protected from
creditors expect to the extent of any interest in the policy retained by the insured.

Marketability and suitability for borrowing


After 3 years, if the policyholder finds that he is unable to continue
payment of premiums he can surrender a policy for a cash sum. A life insurance
policy is accepted as a security for a commercial loan.

Loans from the insurance company


31

A policy holder can take a loan from his insurance company against the
Security of his life insurance policy provided the terms of the terms of his policy
allow such a loan. This loan can be taken usually after a period of 3 years from
commencement of the policy and is a percentage of its surrender value.

Investment options
The unit link products gives comprehensive insurance solutions that cater
to an individuals dual need of earning potentially high returns as well as stay for
life. Thus there is an option to invest money in the products that combine the best of
insurance and investment. In a volatile market conditions it is possible to secure
both as one can hedge the investment with saver investment vehicles that provide a
diversified portfolio.

Tax benefits
The Indian income tax act provides tax concessions to the policyholder
both on payment of premium and on the maturity amount. Under sec 88 the tax
benefits on premium paid by an individual for life insurance policies on his own
life\on the life of spouse \children minor or major, including married daughters.

Protection to wife and children


32

Under sec 6 of the married womens property act if a married man takes a
policy of life

insurance on his own life and expenses on the face of it to be for the

benefit of his wife or of his wife and children or any of them, then it shall be
deemed to be a trust for the benefit of his wife and children or any of them,
According to the interest so expressed and shall not so long as any object of trust
remains be subject to the control of the husband or to his creditors or form part of
his estate. An insurance policy taken by a married man in the above manner is ideal
way to protect the interest of his wife and children, even after his untimely death.

CONCLUSION
33

The financial markets have continued to witness unprecedented liberalization,


growth and reforms over the last decade prompted by regulatory compulsions and a
rapid integration between domestic and global markets. And as a result, one has
seen substantial growth in the number of financial firms (insurance companies,
mutual funds, brokerages, banks etc.) and in the number and variety of financial
products and services offered by them. As the need of the people is changing so is
changing the investment habits of the people and this has brought in a spate of new
products and schemes where people can invest. The concept of insurance as an
investment option has arrived where people first identify the varying needs of
money then converts the needs into specific amount of money and time required to
achieve the objective of investments plans. The objective of insurance as an
investment is to ensure that investments are driven by pre determined and well
thought out investment plan and that the investments are suitable and adequate to
meet these plans. But for this the planner must understand the universe of
investments options. He/she must be well informed on the risk and return attributes
of these options.
In addition to the above, companies should also innovate to come up with better
products that would suit the Indian population and should also try to market and sell
their products through new channels of distribution that can be effective in selling
their products to the masses. People should identify their needs and then decide on
the type of policy they want to invest in. insurance is a good investment option for
those people who do not know where to invest and who do not want to the risk of
capital erosion. But, people who are financially savvy can opt for term insurance
and invest the rest in other options that may give them higher returns.

Bibliography
34

BOOKS:
Life and Health Insurance Kenneth Black and Harold D.
Fundamental of Risk and Insurance- Emmet J Vaughan and John
Willy
WEBSITES
www.licindia .com
www.irdaindia.org
www.iciciprulife.com

35

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