A REPORT ON INPLANT TRAINING DONE AT BIRLA SUN LIFE INSURANCE A Report Submitted In Partial Fulfillment Of The Requirements Of BBA

Program (20 08-11) In Plant Training Prepared By Pankaj Kumar Shahu 08AHB1319 BACHELOR OF BU SINESS ADMINISTRATION Under the Guidance of Mrs. D. Suthamathi DEPARTMENT OF BUSINESS ADMINISTRATION AVS COLLEGE OF ARTS & SCIENCE (Affiliated to Periyar University) SALEM 636 106

ACKNOWLEDGEMENT I take this opportunity to express my acknowledgement and deep sense of gratitud e for rendering valuable assistance and guidance to me by following personality for successful completion of my project. I am highly obliged to my project guide Mrs.D. Shuthamathi for his personal encouragement, prompt assistance and help p rovided to me in completion of my project. She has helped me a lot by giving sug gestions and guidance whenever needed. Her contribution has been extremely usefu l and is greatly appreciated. I honor his knowledge and competence in the field of management. I am greatly indebted to the head of department of BBA (CA) Mr G. Mahendran for providing me the facilities of the In-plant training. PANKAJ KUMAR SHAHU 08AHB1319 BBA(CA) 2

PREFACE To achieve partial and concrete results, it is necessary that theoretical knowle dge must be supplemented with practical environment. Keeping this view in mind, I have completed my research work regarding Birla Sun Life Insurance.By doing this research work I have learnt a lot of things which would be really helpful for m e in future. This experience in decision making and practical application of kno wledge has contributed greatly to my growth. PANKAJ KUMAR SHAHU 08AHB1319 BBA(CA) 3

DECLARATION I hereby declare that the survey entitled, Birla Sun Life Insurance that no part o f research work has been submitted for any other degree. I also undertake that w ork is purely academic and no part has been copied or taken from any where. The motive behind the research project was In plant Training in Birla Sun Life Insur ance in Company. PANKAJ KUMAR SHAHU 08AHB1319 BBA(CA) 4

INDEX Serial No. Particulars Page No. 1 2. 3. Introduction Review Of Literature Need, Scope & Objective Of The Study Research Methodology Data Analysis And Interpretation Findings Of The Study Suggestion Li mitations Conclusion Recommendations Bibliography Annexure 6 36 43 45 49 58 60 62 64 66 68 70 4. 5. 6. 7. 8. 9. 10. 11. 12. 5

CHAPTER-1 INTRODUCTION 6

Introduction:The Birla Sunlife Insurance Company was established in the year 2006, with a joi nt venture of two leading companies likely Aditya Birla group and Sunlife financials(USA). Birla Sun Life Insurance pioneered the unique Unit Linked Life Insurance Solutions in India. Within 4 years of its launch, Birla Sunlife Insura nce has cemented its position as a leading player in the Private Life Insurance Industry. Birla Sunlife insurance has been focus on Investment Linked Insurance Products, supported with protection products to maintain leadership in product i nnovation. Multi distribution channels- Direct Sales Force, Alternate Channels a nd Group offering convenient channels of purchase to customers. It has establish ed Web-enabled IT systems for superior customer services to have issued policies over the Internet. Corporate governance and a high degree of transparency in al l business practices and procedures to have an operational Business Continuity P lan and all Strong fundamentals based on the Aditya Birla group's local insight and Sun Life financials's global expertise. The head office is situated in below address, Birla Sunlife Insurance company lt d. 6th floor, Vaman center Makhwana Road, Off andheri-kurla Road Andheri(East),M umbai-400059 The Branch office in Mangalore is located in:Birla Sunlife Insuranc e company ltd. 2nd floor, Premium Enclave Light House Hill Road Mangalore-575002 7

Vision:To create long term value along with market leadership Missions: To help p eople mitigate risks of life, accident, health and money at all stages and under all circumstances Enhance the financial future of our customers, including ente rprises. Values: Integrity Commitment Passion Seamlessness Speed BSLI has contrib uted significantly to the growth and development of the life insurance industry in India by introducing unique Unit Linked Life Insurance Solutions, pure term p lan and a slew of innovative products. By adopting multi-distribution channels s uch as Direct Sales Force, alternate channels and convenient points of purchase, including selling its policies through the ban assurance route and through the internet, BSLI has revolutionized the entire insurance policy-buying experience. Corporate governance and a high degree of transparency in all its business prac tices and procedures, besides world-class processing capabilities and wellprepar ed business continuity planning, have brought about the credibility that BSLI en joys among its patrons. The process of getting sales illustrations signed by cus tomers, offering a free look period on all policies, which are now standard norm s followed by the insurance industry, were introduced by BSLI. 8

Management :C.E.O (ADITYA BIRLA GROUP) Mr.Kumar Mangalam Birla Board of Directors Investment Committee Audit Committee Share Allotment Committee Finance Committee Risk Review Committee Management Team:9

About the Aditya Birla Group The Aditya Birla Group has a turnover close to Rs.3 8,000 crore (as on 31 March 2008) and is one of the largest business houses in I ndia. It enjoys a leadership position in all the sectors in which it operates. W ith over 75 business units spanning the South East Asian belt, Africa, Canada an d the UK among others, it is reckoned as India's first multinational corporation . The group is anchored by 72,000 employees and has seven lakh shareholders, wit h a market capitalization of Rs.53,400 crore. About Sun Life Financial Inc. Sun Life Financial Inc. is a leading international financial services organization providing a diverse range of wealth accumulatio n and protection products and services to individuals and corporate customers. T racing its roots back to 1865, Sun Life Financial and its partners today have op erations in key markets worldwide, including Canada, the United States, the Unit ed Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermu da. As of 31 March 2008, the Sun Life Financial group of companies had total ass ets under management of US$ 343 billion. Sun Life Financial Inc. trades on the T oronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol "SLF". 10

Key peoples of organisation Board of Directors y y y y y y y y y y Mr. Kumar M B irla Mr. Donald A Stewart, Mr. Bishwanath N Puranmalka Mr. Ajay Srinivasan Mr. G ary M Comerford Mr. Suresh N Talwar Mr. Gian P Gupta His Highness Maharaja G Sin gh Mr. Stephan Rajotte Dr. Bharat K Singh Investment Committee y y y y y y y y Mr. B. N. Puranmalka Mr. Eugene Lundrigan M r. Ajay Srinivasan Mr. Vikram Mehmi Mr. Mayank Bathwal Mr. Fabien Jeudy Mr. Vikr am Kotak Ms. Keerti Gupta 11

Management Team Mr. Vikram Mehmi President & Chief Executive Officer Mr. Mayank Bathwal Chief Financial Officer Mr. Mario Braganza Chief Operating Officer Mr. E .N. Goveia Head - Direct Sales Force Mr. Amit Punchhi Senior Vice President - Th ird Party Distribution Mr. Bhavesh Sanghvi Head - Group Life & Pensions Mr. Sneh al Shah Senior Vice President - Operations Ms. Anjana Grewal Senior Vice Preside nt - Marketing & Communications Mr. Rajesh Bhojani Senior Vice President - DSF E xpansion Mr. K.H. Venkatachalam Vice President Human Resource Mr. Fabien Jeudy V ice President, Chief & Appointed Actuary Mr. Lalit Vermani Vice President - Comp liance Mr. Melvyn D'souza Vice President Risk Management and Internal Audit Mr. Vikram Kotak Vice President - Investments Mr. Bhalachandra Nayak Vice President Strategy 12

Competitors:y y y y y y y y y y y Life insurance corporation ING vysya life insu rance Max network life insurance MetLife insurance Aviva life insurance Bharathi Axa life insurance Bajaj Allianz life insurance Tata AIG life insurance ICICI P rudential Life Insurance Reliance life insurance Kotak Mahindra life insurance Competitors in Detail: Aviva life insurance: Aviva Life Insurance Company India P vt. Ltd. is a joint venture between Aviva of UK and Dabur, one of India's leadin g producers of traditional healthcare products. Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share. Ba jaj Allianz: Bajaj Allianz is a joint venture between Allianz AG one of the worl d's largest insurance companies, and Bajaj Auto, one of the biggest 2 and 3 whee ler manufacturers in the world. Bajaj Allianz is into both life insurance and ge neral insurance. Allianz Group is one of the world's leading insurers and financ ial services providers. Founded in 1890 in Berlin, Allianz is now present in ove r 70 countries HDFC Standard Life Insurance Co. Ltd: is a joint venture between HDFC Ltd., India's largest housing finance institution and Standard Life Assuran ce Company, Europe's largest mutual life company. It was the first life insuranc e company to be granted a certificate of registration by the IRDA on the 23rd of October 2000. ING Vysya Life Insurance Company Limited: is a joint venture betw een Vysya Bank and ING Group of Holland, the world's 4th largest financial servi ces group, with presence across 50 countries, and a heritage of over 150 years. 13

Kotak Mahindra Old Mutual Life Insurance Ltd: is a joint venture between Kotak M ahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra is one of India's l eading financial institutions and offers a range of financial services such as c ommercial banking. Life Insurance Corporation of India: (LIC) is an autonomous b ody authorized to run the life insurance business in India with its Head Office at Mumbai. It has been established by an act of the Parliament and started funct ioning from 1/9/1956. ICICI Prudential Life Insurance : ICICI Prudential life in surance is a part of ICICI Bank. Max New York Life Insurance Company Limited is a joint venture between Max India Limited, a multi-business corporate, and New Y ork Life International, a global expert in life insurance. New York Life is a Fo rtune 100 company that has over 160 years of experience in the life insurance bu siness. MetLife India Insurance Co. Pvt Ltd is a joint venture between MetLife G roup and its Indian partners. The Indian partners include J&K Bank, Dhanalakshmi Bank, Karnataka Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Min i Muthoothu. Reliance Life Insurance Company Limited is a part of Reliance Capit al Ltd. of the Reliance - Anil Dhirubhai Ambani Group. The company acquired 100 per cent shareholding in AMP Sanmar Life Insurance Company in August 2005. Takin g over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructu re and a portfolio. SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France. SBI Life Insurance is registered with an aut horized capital of Rs 500 crore and a paid up capital of Rs 350 cores. Tata AIG Life Insurance Company Limited is a joint venture between Tata Group and America n International Group, Inc. (AIG). Tata Group is one of the oldest and leading b usiness groups of India. Tata Group has had a long association with India's insu rance sector having been the largest insurance company in India prior to the nat ionalization of insurance. The Late Sir Dorab Tata was the founder Chairman of N ew India Assurance Co. Ltd., a group company incorporated way back in 1919. Shri ram Life Insurance Company Ltd is a joint venture between the Chennai-based Shri ram Group and the South African insurance major Sanlam. The company launched its operation in India in December 2005 14

STRENGTH: Multi-channel distribution and one of the largest distribution networks in India . Implementing Six-Sigma process. Customer centric products and services. Superi or investment and risk management framework 1 Million Policies sold within 3 and half years. Company has maximum number of MDRT as well as good number of HNI ad visors. Training process of the company is very strong. Different plan for diffe rent peoples. According to the change in surrounding environment like changes in customer requirement. WEAKNESS: COMPANY does not penetrate on the rural market at a time. There is no plan for t he low income group. Fees for the advisor is high than the other company. OPPORTUNITY: Insurance market is very big, where company can expand its horizon in insurance industry. Though good investment and insurance it is easy to top Indian customer s. The huge insurance market (77%) is left so company has opportunity to expand our products. To associate with the more number of HNI. THREATS: OLD HABITS DIE HARD: Its still difficult task to win the confidence of public towa rds private company. The company is facing major threats from LIC -which is an o nly government company. Plans for all income groups are not available which can create adverse effect later on the market share of the company. 15

INTRODUCTION TO THE REPORT EVALUATION OF INSURANCE The evaluation of insurance dates back as early as the commencement of trade bet ween two countries in England, especially between the European countries. During the transportation of goods, there were chances of the ship being drowned in th e rough sea conditions or attacked by the pirates, leading to huge loss to the p arty sending goods. The traders of England devised a way whereby the loss of the goods would be compensated by every trader putting in some amount as per their financial strength so that a single party may not be the loser; this is the earl ier concept of insurance. This concept is taking shape for the last 300 years, y et in India the first insurance company was established in 1818 with the advent of European widows. The name of the company was oriental life insurance company. WHAT IS INSURANCE? Insurance is a mechanism that ensures an individual to thrive on adverse consequ ences by compensating the individual, his/her loss financially. Every individual in the world and all activities connected with him/her, be it life, profession, business, travel or any other pursuits are subject to unforeseen and uncalled f or hazards or dangers. The benefit that an individual enjoys in his life by owni ng a car or a house or a factory can be snatched by sudden accident which can re nder even the individual immobile, and his family vulnerable. At this critical j uncture, only insurance helps him not only to survive but recover his loss and c ontinue his life in a normal manner, which would otherwise be unthinkable. The c oncept of insurance is quite simple. People, who are in similar trade and are ex posed to the same risks, congregate and some to an agreement that if any individ ual member suffer a loss, then the loss will be shared by others and minimized i n order to enable the individual member recover from the loss and cover his grou nd. Similarly the different kinds of risks can be identified and separate groups can be formed to counter such risks and reduce to impact to manageable proporti on, in which the share could be collected from the members either after the loss or in advance, at the time of admission to the group. This is an exemplary sign of humanity and insurance therefore serve the mankind to a great extent; a poin t most of the individual tend to overlook, since monetary aspect is involved. No w such is for tangible assets. 16

The concept of insurance has been extended beyond the coverage of tangible asset s. Exporters run the risk of importers in other country defaulting as well as lo sses due to sudden fluctuations in the currency exchange rates, economic policie s turmoil. The risk are not insured. Doctors run the risk of being charged with negligence and can subsequently liable for damage. The amount in question can be fairly large, beyond the capacity of the individual to bear. These are insured. Thus insurance is extended to intangible assets. In some countries even the voi ce of a singer , legs of the footballer can be insured, even though the advantag e of spread may not be available in these cases. Satisfaction of economics needs requires generation of income from some sources. If the property, which is the source of such income, were lost fully or partially, permanently, or temporarily , the income too would stop. The purpose of insurance is to safeguard against su ch misfortune few, through the help of the fortune many, who were exposed to the same risk , but saved from the misfortune . Thus the essence of insurance is to share losses substitute certainty by uncertainty. The different types of human activities that come under the umbrella of insurance are as follows. 1. House/office/factory or any moveable object destroyed in life 2. Shipment or transportation of goods By ship, destroyed in catastrophe. 3. jewellery /cash/ h ousehold goods Stolen or robbed 4. Goods in transit by roads or railways destroy ed. 5. Theft or accident of vehicles 6. Financial cover in ailment /surgery etc - Fire insurance - Marine insurance - Burglar insurance - Carrier insurance - Vehicle insurance - Health insurance All these are non-life insurance. In conclusion one can safely say that the purp ose of insurance be it or non-life is to transfer the financial loss to the insu rance company who spreads in over to the policyholders. Life insurance Life insurance (Life Assurance in British English) is a type of insurance. As in all insurance, the insured transfers a risk to the insurer. The insured pays a premium and receives a policy in exchange. The risk assumed by the insurer is th e risk of death of the insured. 17

How life insurance works There are three parties in a life insurance transaction; the insurer, the insure d, and the owner of the policy (policyholder), although the owner and the insure d are often the same person. For example, if John Smith buys a policy on his own life, he is both the owner and the insured. But if Mary Smith, his wife, buys a policy on John's life, she is the owner and he is the insured. The owner of the policy is called the grantee (he or she will be the person who will pay for the policy). Another important person involved is the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable b eneficiary designation. With an irrevocable beneficiary, that beneficiary must a gree to changes in beneficiary, policy assignment, or borrowing of cash value. T he policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk assumed. Special provisions apply, including a suici de clause wherein the policy becomes null if the insured commits suicide within a specified time for the policy date (usually two years). Any misrepresentation by the owner or insured on the application is also grounds for nullification. Mo st contracts have a contestability period, also usually a two-year period; if th e insured dies within this period, the insurer has a legal right to contest the claim and request additional information before deciding to pay or deny the clai m. The face amount of the policy is normally the amount paid when the policy mat ures, although policies can provide for greater or lesser amounts. The policy ma tures when the insured dies or reaches a specified age. The most common reason t o buy a life insurance policy is to protect the financial interests of the owner of the policy in the event of the insured's demise. The insurance proceeds woul d pay for funeral and other death costs or be invested to provide income replaci ng the deceased's wages. Other reasons include estate planning and retirement. T he owner (if not the insured) must have an insurable interest in the insured, i. e. a legitimate reason for insuring another persons life. The insurer (the life i nsurance company) calculates the policy prices with intent to recover claims to be paid and administrative costs, and to make a profit. The cost of insurance is determined using mortality tables calculated by actuaries. Actuaries are profes sionals who use actuarial science which is based in mathematics (primarily proba bility and statistics). Mortality tables are statistically based tables showing average life expectancies. The three main variables in a mortality table are age , gender, and use of tobacco. 18

The mortality tables provide a baseline for the cost of insurance. In practice, these mortality tables are used in conjunction with the health and family histor y of the individual applying for a policy in order to determine premiums and ins urability. The current mortality table being used by life insurance companies in the United States and their regulators was calculated during the 1980s. There i s currently a measure being pushed to update the mortality tables by 2008. The c urrent mortality table assumes that roughly 2 in 1,000 people aged 25 will die d uring the term of coverage. This number rises roughly quadratically to about 25 in 1,000 people for those aged 65. So in a group of one thousand 25 year old mal es with a $100,000 policy, a life insurance company would have to, at the minimu m, collect $200 a year from each of the thousand people to cover the expected cl aims. The insurance company receives the premiums from the policy owner and inve sts them to create a pool of money from which to pay claims, and finance the ins urance company's operations. Contrary to popular belief, the majority of the mon ey that insurance companies make comes directly from premiums paid, as money gai ned through investment of premiums will never, in even the most ideal market con ditions, vest enough money per year to pay out claims. Rates charged for life in surance increase with the insured's age because, statistically, a people are mor e likely to die as they get older. Since adverse selection can have a negative i mpact on the financial results of the insurer, the insurer investigates each pro posed insured (unless the policy is below a company-established minimum amount) beginning with the application, which becomes part of the policy. Group Insuranc e policies are an exception. This investigation and resulting evaluation of the risk is called underwriting. Health and lifestyle questions are asked, and the a nswers are dutifully recorded. Certain responses by the insured will be given fu rther investigation. Life insurance companies in the United States support The M edical Information Bureau, which is a clearinghouse of medical information on al l persons who have ever applied for life insurance. As part of the application, the insurer receives permission to obtain information from the proposed insured' s physicians. Life insurance companies are never required by law to underwrite o r to provide coverage on anyone. They alone determine insurability, and some peo ple, for their own health or lifestyle reasons, are uninsurable. The policy can be declined (turned down) or rated. Rating means increasing the premiums to prov ide for additional risks relative to that particular insured. Many companies use four general health categories for those evaluated for a life insurance policy. These categories are Preferred Best, Preferred, Standard and Tobacco. Preferred Best 19

means that the proposed insured has no adverse medical history is not under medi cation for any condition, and his family (immediate and extended) has no history of early cancer, diabetes or other conditions. Preferred is like Preferred Best , but it allows that the proposed insured is currently under medication for the condition and may have some family history. Most people are in the Standard cate gory. Profession, travel, and lifestyle also factor into not only which category the proposed insured falls, but also whether the proposed insured will be denie d a policy. For example, a person who would otherwise be in the Preferred Best c ategory will be denied a policy if he or she travels to a high risk country. Upo n the death of the insured, the insurer will require acceptable proof of death b efore paying the claim. The normal minimum proof is a death certificate and the insurer's claim form completed, signed, and often notarized. If the insured's de ath was suspicious and the policy amount warrants it, the insurer may investigat e the circumstances surrounding the death, before deciding whether there is a le gal obligation to pay the claim. Proceeds from the policy may be paid in a lump sum or as an annuity paid over time in regular recurring payments for either for the life of a specified person or a specified time period. Contribution of life insurance in development of economy Contribution of Life Insurance Sector in the Economy Flow of Insurance Industry in India Structure of insurance industry: Snap Shot Industry Aggregation of long term savings Spread of financial services in rural Areas Long term funds for in frastructure development of capital Markets/ Economic Growth Employment generati on Special Futures Growth Potential 20

DETAILS OF PRODUCTS PRODUCTS Life is unpredictable. But in face of adversity, our responsibilities t owards our parents, children and loved ones need not be compromised. Insurance p lanning equips you to smooth out the uncertainties and adversities that life mig ht send your way, so that the best that life has to offer, secure in the knowled ge that your beloved ones are well provided for. BSLI offers a complete range of insurance products 1. Protection Plans 2. Savings Plans 3. Child Plans 4. Investment Plans 5. Retir ement Plans 6. Group Plans 7. Rural Plans Insurance Plans BSLI offers Lifeguard - a set of pure protection plans. Choose f rom amongst three different product structures to insure your life and provide t otal security to your family, at a very affordable cost. Level Term Assurance with return of premium On death the entire sum assured will be paid. On maturity, all the premiums paid will be returned. Level Term Assura nce without return of premium On death the entire sum assured will be paid. No s urvival or maturity benefits. You can also enhance the above two policies by add ing Accident & Disability Benefit Rider and Waiver of Premium Rider (WOP) 21

Level Term Assurance - Single premium: On death the entire sum assured will be p aid. No survival or maturity benefits. Protection Plans BSLI offers a variety of policies that give you the benefits of protection and the opportunity to save f or important assets or events, like a home, a car or a wedding. A regular premiu m unit-linked insurance plan with an assurance of Capital Guarantee# with the ad ded advantage of flexible liquidity option. An ideal plan for long term planning with the benefit of liquidity. The key features of the plan are: Flexibility to choose a specific level of prot ection (Sum Assured), based on a multiple of the annual premium. You can also ch oose the term of the plan. At the end of the term, the higher of the value of un its or the guaranteed value is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable. Facility to make withdraw als from the 6th policy year onwards till the end of the policy term. Every year withdraw up to 10% of the value of units. Additional credits payable as a perce ntage of the initial annual premium are paid along with the death or maturity be nefit. Additional insurance for 10 years after the maturity, for an amount of 50 % of the Sum Assured Savings Plans Flexibility to make additional investment with the help of the top -up facility. Flexibility to increase / decrease your annual premium Amount Faci lity of Automatic Premium Payment- With this facility you can take a temporary b reak from premium payment. Total transparency with the premium allocations, and other charges declared upfront. 22

The guaranteed value of the unit fund is the value of all invested premiums (pre miums net of all charges) along with the declared bonus interests. With Automati c Premium Payment facility, you can avail a temporary break from premium payment for a maximum of 1 year. This facility is available once if the premium paying term is less than 15 years and twice, if it is 15 years or more. You can also en hance your policy by adding Accident & Disability Benefit Rider , Waiver of Prem ium Rider and Critical Illness Rider .A regular premium unit-linked insurance pl an with an assurance of Capital Guarantee# An ideal plan for your long-term savi ngs and protection requirement. The key features of the plan are: Flexibility to choose a specific level of protection (Sum Assured), based on a m ultiple of the annual premium. You can also choose the term of the plan. At the end of the term , the higher of the value of units or the guaranteed value is paid. On death, Su m Assured along with the higher of value of units or the guaranteed value is pay able Additional credits payable as a percentage of the initial annual premium ar e paid along with the death or maturity benefit. Additional insurance for 10 yea rs after the maturity, for an amount of 50% of the Sum Assured. Flexibility to m ake additional investment with the help of the top-up facility. Flexibility to i ncrease / decrease your annual premium amount Facility of Automatic Premium Paym ent- With this facility you can take a temporary break from premium payment. Tot al transparency with the premium allocations, and other charges declared upfront . The guaranteed value of the unit fund is the value of all invested premiums (p remiums net of all charges) along with the declared bonus interests. With Automa tic Premium Payment facility, you can avail a temporary break from premium payme nt for a maximum of 1 year. This facility is available once if the premium payin g term is less than 15 years and twice, if it is 15 years or more. The capital g uarantee is applicable only on the invested premium and the declared bonus inter ests. You can also enhance your policy by adding Accident & Disability Benefit R ider, Waiver of Premium Rider and Critical Illness Rider. 23

A unit-linked insurance plan with an assurance of Capital Guarantee which offers you the benefit of a limited premium payment term. An ideal plan for protection with wealth creation that offers the flexibility of a limited premium paying te rm. Flexibility to choose a premium payment term of 5, 7 or 10 years for a matur ity term of 10, 15 or 20 years respectively. Flexibility to choose a specific le vel of protection (Sum Assured), based on a multiple of the annual premium. At t he end of the term (maturity), the higher of the value of units or the guarantee d value is paid. On death, Sum Assured along with the higher of value of units o r the guaranteed value is payable. Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit. F acility to make withdrawals from the 6th policy year onwards till the end of the policy term. Every year withdraw up to 10% of the value of units Flexibility to make additional investment with the help of the top-up facility. Flexibility to increase / decrease your annual premium amount Total transparency with the prem ium allocations, and other charges declared upfront. The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) a long with the declared bonus interests. The capital guarantee is applicable only on the invested premium and the declared bonus interests. You can also enhance your policy by adding Accident & Disability Benefit Rider and Critical Illness R ider. Presenting Premier Life The Preferred plan for the Preferred Customer. The key features of the plan are: Limited premium payment option: Choose from among a 3, 5, 7 or 10 year premium paying term. Choice of sum assured: Choose a sum a ssured, which is a minimum multiple of 1 and a maximum multiple of 25 times the annual contribution. Additional allocation of units on a periodic basis. Facilit y to top-up your investment any time you have surplus funds. Choose from among f our funds, based on your investment objective and risk appetite. 24

Flexibility to decrease your sum assured. Add-on riders to protect you against a ny eventuality. Loans against the policy. You can also enhance your policy by ad ding Critical Illness Rider, Accident & Disability Benefit Rider. Presenting Lif e Time unit linked plans that meet your changing needs over a lifetime. These sol utions have been developed to meet your savings, protection and investment needs at every stage in life. Protection Choose a specified level of protection (avai lable only with Lifetime). Two levels of Sum Assured to choose from (available o nly with Lifetime II). Flexibility to increase or decrease your sum assured. Add -on riders to protect you against any eventuality. Savings Flexibility to increa se or decrease your contribution. Facility of Premium Holiday, wherein the polic y continues even if there is a temporary break in the payment of annual contribu tion (available only with Life Time). Facility of Automatic Cover Continuance, w herein the policy continues even if there is a temporary break in the payment of annual contribution Facility to top-up your investment any time you have surplu s funds. Additional allocation of units on a periodic basis. Loans against the p olicy. Investment: Choose from among four funds, based on your investment object ive and risk appetite. Choice to switch between investments options (4 free swit ches every policy year). You can also enhance your policy by adding Critical Ill ness Rider, Major Surgical Assistance Rider, Accident & Disability Benefit Rider , Accident Benefit Rider (available only with Life 25

Time) and Waiver of Premium Rider. An insurance plan that gives added protection , savings and multiple options, all in one! The flexibility to choose your premi um contribution. The flexibility to choose amongst three levels of cover (in the form of sum assured) for the same amount of total annual contribution. The flex ibility of shifting between the three levels of cover, as you require. The flexi bility of receiving your maturity proceeds as a lump sum or in equal annual inst allments over 3 or 5 years. You can also enhance your policy by adding Variety o f Riders An insurance plan that gives you added protection, savings, multiple op tions, plus the power of liquidity. The flexibility to choose your premium contr ibution. The flexibility to choose amongst three levels of cover (in the form of sum assured) for the same amount of total annual contribution. The flexibility of shifting between the three levels of cover, as you require. The flexibility o f receiving your maturity proceeds as a lump sum or in equal annual installments over 3 or 5 years. The flexibility of withdrawing up to 10% of the accumulated value of your policy, after the first 5 policy years. You can also enhance your policy by adding Variety of Riders An ideal plan for those who want to accumulat e funds on a regular basis while enjoying insurance protection. Guaranteed Benef its: Guaranteed additions @ 3.5% of the Sum Assured, compounded annually for the first 4 years of the policy. Extended Life Cover: An extended cover for 5 years after the maturity of the policy, for 50% of the sum assured, at no extra cost. Maturity Benefit: At the end of the term, the policyholder receives the full su m assured, the guaranteed additions and the vested bonuses. Death Benefit: The b eneficiary receives the sum assured, the guaranteed additions and the vested bon uses in case the life assured were to meet with an unfortunate event. In case th e life assured is aged 7 years or less, the basic premium paid will be returned. You can also enhance your policy by adding Critical Illness Rider, Major Surgic al Assistance Rider, Accident & Disability Benefit Rider, Waiver of Premium Ride r (WOP) As a responsible 26

parent, you will always strive to ensure a hassle-free, successful life for your child. However, life is full of Uncertainties and even the best-laid plans can go wrong. Heres how you can give your child a 100% safe and assured tomorrow, wha tever the uncertainties. Smart Kid is especially designed to provide flexibility and safeguard your childs future education and lifestyle, taking all possibiliti es into account. Choose from amongst a basket of 4 plans: Smart Kid regular prem ium Smart Kid unit-linked regular premium Smart Kid unit-linked regular premium II Smart Kid unit-linked single premium II CHILD PLANS All these plans offer you : Financial Benefits: Regular payments at critical stages in your childs life, like Board examinations, Graduation and Post-graduation. Total peace of mind, even if you a re not around Sum Assured is paid immediately: Ensures that your loved ones stay financially secure, even in your absence. All future premiums are waived: Ensur ing that your family is not financially burdened in your absence. Policy benefit s continue: The educational benefits of the policy continue, ensuring that your child can realize his or her dreams without any hassles. Development Allowance: Smart Kid guarantees regular income to secure your childs educational career and also ensures his or her all-round development, for a nominal additional amount. The Income Benefit Rider takes care of this through an annual payment of 10% of the sum assured, to your child, till the maturity of the policy, in the unfortun ate event of the death of the parent. All Smart Kid plans can be enhanced with t he Accident & Disability Benefit Rider and Income Benefit Rider . You can also a n Accident Benefit Rider to a Smart Kid Regular Premium policy, and a Waiver of Premium Rider (WOP) to Smart Kid unit-linked regular premium policy. 27

Life Link II is a unique plan that combines the security of a life insurance pol icy with the opportunity of enjoying high returns on your investments, without t he market risks compromising on the protection of your family! Death Benefit: Th e Sum Assured under the product has 2 options, either 500% of the initial premiu m or 105% of the initial premium. In the event of an unfortunate death, the bene ficiary will receive higher of the value of units or the initial death benefit, less any withdrawals. Withdrawal Benefit: One can make partial withdrawals from the accumulated value of the policy after completion of one policy year. Flexibi lity: Choose from four fund options, based on your investment objective and risk appetite. If at a later stage your financial priorities change, you can switch between the various fund options, absolutely free, 4 times a year. Investment Plans Life Expectancy has been rising rapidly and today you can expec t to live longer than your earlier generations. For you, this increase will mean a longer retirement life, stretching into a couple of decades. BSLI Retirement Solutions that combine the best of insurance and investment. These solutions are developed to ensure your peace of mind for the years to come. 1. Why plan for r etirement? 2. How much should I set aside for retirement? 3. The impact of infla tion on your retirement savings 4. Why plan early? 5. About Annuities Why plan for retirement? For too many people, the joy of retirement after years of hard work is eclipsed by the financial uncertainties that it brings. Despite all the planning and saving, you can never sure whether your money will last a l ifetime. Retirement planning offers a way to ensure a more enjoyable, stress fre e tomorrow. A prudent plan will ensure that increasing life expectancy, higher i nflation and increasing taxes do not eat away into your hard earned savings. 28

Retirement Plans How much must I set aside for retirement? To ensure a comfortab le retired life, you would be wise to invest money into additional avenues like pension plans. How much you need to invest can be answered by answering some que stions such as: 1. How long do you have to save that amount before retirement? 2 . Where can you invest your retirement money? 3. How much risk are you willing t o take on your investments? In an era of competitive parity, the only asset that makes a decisive difference between corporate success and failure is the qualit y of human capital. Employee benefits have proven to be an excellent tool to opt imize the retention of talent and improve an organizations bottom-line. The quali ty of an organizations employee benefits establishes and maintains a company's im age as a caring employer. Optimum care of employees is a long-term investment th at results in a sustained competitive advantage for an organization in the times to come. BSLI Group Solutions Advantage: An integrated basket of employee benef its solutions that offer incomparable flexible benefits. Sound investment manage ment that focuses on safety, stability and profitability of the portfolio. Perso nalized financial planning for your employee that takes care of his/her changing financial needs at every stage of life. Quality service initiatives and transpa rency across all operations, promising superlative operational efficiency. Group Solutions Group Term Assurance: Helps provide affordable cover to members of a group. Group Gratuity Plan: Helps employers fund their statutory gratuity o bligation in a flexible and hassle-free manner. Group Superannuation Plan: A fle xible scheme (defined benefit and defined contribution) to provide a retirement kitty for each member of the group. 29

Group Term Assurance: BSLI flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation /rank or a multiple of salary, and can be extended to all employees between the ages of 18 and 65 years. The benefit under the policy is paid on the event of th e members death to the beneficiary nominated by the member. It is a one-year rene wable policy where one master policy covers all proposed employees comprising th e group, with a minimum group size of 25 persons. New members can join the group and outgoing members can leave the group at any point during the policy term. Highlights include: Greater convenience for the employees with relaxed underwrit ing and medical requirements. "Free Cover Limits" with simplified underwriting d epending upon the number of employees in the group and the level of cover chosen . Guaranteed benefit: On death during the term of the contract (while in Service ), the sum assured will be paid to the beneficiary of the employee. Choice of ad ditional coverage in form an Accident and Disability Benefit Rider and Critical Illness Cover Premium is viewed as a business expense in the year of payment. Group Gratuity Plan: BSLI group gratuity plan helps employers fund their gratuit y obligation in a scientific manner. Employers can avail of the tax benefits as applicable to approved gratuity funds. The plan can also be customized to struct ure schemes that can provide benefits beyond the statutory obligations. Highligh ts include: Wider choice of investments with Market Linked Plans - to meet the d iverse financial goals. We offer 4 investment options (short-term debt, debt and balanced and capital guarantee plan) where investments will be made in accordan ce with the fund objectives. Transparency through Daily disclosure of Unit Value and regular disclosure of the portfolio of each of the investment option 30

Flexibility through switching and contribution redirection option to enable resh uffling of portfolio Bundled Life Cover greater value to the employee by packagi ng life insurance covers with the gratuity, with minimal amount of underwriting. Actuarial services to provide a scientific estimation of the gratuity liability . Low explicit charge structure with the conditions for exit specified upfront. Enhanced service levels through faster claim settlement, easier access to inform ation and regular statements. Complete end to end solution in the legal and regu latory approval process for scheme set up or transfer Employee Benefits: The contribution made by the employer is not included in the value of taxable perquisites in the hands of the employee. Gratuity received up to Rs 350000 is exempt from Income tax under Sec 10(10) Annual contribution up t o 8.33% of salary bill in a financial year is allowed a deduction for the purpos e of computation of profits and gains of business. Contribution towards past service liability is allowed as deduction as per the I ncome Tax rules. Group Superannuation Plan: BSLI Superannuation Scheme (for both Defined Benefit and Defined Contribution funds) offers substantial benefits to both employers an d employees. The employer and employee can avail of tax benefits applicable to a n approved superannuation trust. The scheme will provide for a retirement fund f or each participating employee. An employee would be able to choose from various annuity options or opt for partial commutation of corpus at retirement. 31

Highlights include: Wider choice of investments with Market Linked Plans to meet the diverse financial goals. We offer 5 investment options (short-term debt, de bt, balanced, growth and capital guarantee plan) where investments will be made in accordance with the fund objectives. Control - Each member/employer can exerc ise greater control over investments by choosing one or more of the investment o ptions. Multiple Annuity Options - 5 annuity options and open market option Tran sparency - Transparency through Daily disclosure of Unit Value and regular discl osure of the portfolio of each of the investment option Flexibility - Flexibilit y through switching and contribution redirection option to enable reshuffling of portfolio Low explicit charge structure with conditions for exit specified upfr ont. Enhanced service levels through faster claim settlement, easier access to i nformation and regular statements. Complete end to end solution in the legal and regulatory approval process for scheme set up or transfer BSLI Rural Products a re designed to meet the needs of the rural consumers. These products offer the f ollowing features: 1. Low and Affordable Premiums 2. Life Cover 3. Savings Optio n 4. Hassle free procedure BSLI offers 2 specially designed rural plans. a) BSL I Endowment Plan b) BSLI Regular Premium BSLI Endowment Plan: BSLI offers the following features: 32

Rural Plans Life Cover and Savings Regular Premiums Age at entry 18 - 45 Yrs Pre mium Mode Half Yearly / Yearly Term 5,10,15 Yrs Sum Assured Rs.5,000 -20,000 Pre mium / Year Rs. 507 - 553 ( SA: Rs.10,000) Maturity/Death benefit Sum Assured BSLI - Regular Premium: BSLI is a regular premium policy with the following feat ures: Individual policy Only Life cover Term - 3 & 5 Yrs Age independent premium Age at entry 18 - 45 Yrs Sum Assured Single Premium / Year Rs 50 200 Maturity/D eath benefit Rs.5,000 - 20,000 Death Benefit Sum Assured IRDA: The insurance sector has been opened up in India, as there was an urgent n eed. The international experience indicates those country with a liberalized ins urance sector have witnessed a rapid growth in premium volumes enhancing the dom estic saving rate. This happened in China, Malaysia and Singapore where a compet itive market has led to improvement in Services and quicker settlement of claims . And rightly therefore a decision was taken by the Government of India to open up Insurance sector. The establishment of IRDA in the month of April 2000 has be en important development in this direction, making the end of monopoly in the in surance sector. 33

WHY INSURANCE IN INDIA: Only 22% of the insurance population has been extended c over. Market penetration is low and the potential to exploit is high. Insurance premium per capita is very low. Lack of comprehensive social system benefit and welfare means that demand for pension products is high. Huge middle class of app roximately 300 Million. Existing insurance company score low on customer service front. The insurance market registered growth in the Asian region even though I ndias share in global insurance is less than 0.5% (1988) as compared to USA (24.2 %) and Japan (21%). Studies have revealed that in an emerging market, as disposa ble income rises, Insurance premiums as a ratio of GDP shoots up. The confederat ion of Indian Industry projected a growth of Life Insurance premiums from Rs.350 Billion at present to Rs.140 Billion. The Growth of non-life insurance premium is expected to increase from 75 billion to 375 billion. Out of which, only 10% i s tapped by the existing insurer. Insurance even more than banking is a volume g ame. A very exclusive approach in view is unlikely to provide meaningful numbers . Currently, insurance is bought for the purpose of taxbenefits. A higher percen tage of business is in the rural market. The share of rural new Business insuran ce total new business is 55% in terms of policies and 47% in terms of sum assure d. However, this needs to be viewed in the light of some recent issues that have been raised regarding as to what constitutes the rural market. Therefore, priva te insurers will be best served by middle market approach, targeting the custome r segments that are presently unexploited. How many Indians are aware that LIC h as more than 60 Products and GIC has more than 180 Products? Not only there is a reduction in the premiums of Life Insurance products have long overdue since In dian morality rate has decreased three folds in the last 50 years. There is also scope to increase the yield on life insurance policies (presently 6%) with prop er risk management in place. It is been debated that insurance business does not produce profit in the first five years cross subsidization is a feature of Indi an market. Even the first portfolio vote that is considered 34

profitable, cross subsidizes other departments. Tariffs reduction is likely to r educe profits; further insurers have to institute proper claims management progr ess in order to extract efficiencies. At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The government is soo n to present a new model of taxing life insurance companies at international rat es. New entrants should be well advised to look ahead to the stage where brand s trength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to produce or technology will prove most valuable in the long run. Banks and financial com panies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which already apply in other world market. First Ban king food insurance, fund management and other financial services companies are being to increase their profitability and provide maximum value to their custome rs. Therefore, they are themselves looking for a range of products to distribute . In other market notably Europe; this has resulted in bank assurance. Bank ente ring into the insurance business in India to bank hope to maximize expensive exi sting network by selling a range of products more of a loss alliance between ins urance and bank than a formal ownership. Some Indian entrants like ICICI, HDFC a nd Reliance hope to ride their existing network and customer bases. 35

CHAPTER-2 REVIEW OF LITERATURE 36

REVIEW OF LITERATURE Ramkumar D(2003) studied the role of relationship marketing in life insurance se ctor. In todays impersonal marketplace, customer satisfaction, retention and loya lty are rapidly become the thing of the past. Relationship marketing brings them back to the forefront, providing easyto-apply solutions and strategies for esta blishing meaningful bonds with customers and turning them into reliable, life-lo ng partners. Relationship marketing can be defined as the process to identify and establish, maintain and enhance and, when necessary, terminate relationships wi th customers and other stakeholders at a profit so that the objective of all par ties involved are met; and this is done by mutual exchange and fulfillment of pr omises. The important objectives of relationship marketing are to acquire new cus tomer s, maintain and enhance existing relationships with existing customers, re activation of ex-customers, and handling of customer terminations. The key objec tive of relationship marketing is to establish a one to one relationship with al l the customers. This may sound like a daydream few years ago; but thanks to the technology breakthrough and technological solutions providers it is very much o f reality. Rajesham Ch(2004) revised that insurance sector has not only been playing a lead ing role within the financial system in India but also has significant socio-eco nomical function, making inroads into the interiors of the economy and is being considered as one of the fast developing area in the Indian financial sector too . It has also been facilitating economic development with an objective to build an efficient, effective and a stable insurance business in India as well as a st rong base to both the needs of the real economy and socio-economic objective of the country. It has been mobilizing long term saving through life- insurance to support economic growth and also facilitating economic development, insurance co ver to a large segment of people, while the non-life insurance and reinsurance f irms in India are main providers of risk financing for manmade disasters and nat ural catastrophes. Thus, both life insurance and non-life insurance are found pl aying a significant role in avoiding or facing the risk of life and business ent erprises and lso aiding to certain extents for their smooth sailing. Therefore, an attempt is made in this paper to highlight the developments of insurance sect or in India in a phased manner and to examine the reasons for the entry of priva te and foreign insurance players into Indian insurance market and to present the changing scenario of insurance business in India. It is also attempted to exami ne the growth of Indian insurance sector during the period of pre and post liber alization and finally to 37

suggest the strategies and challenges need to be adopted by Indian insurance sec tor in the light of global scenario so as to enhance its market share. Mehra J(2005) studied that economic growth in the emerging markets has time and again outpaced the developed and industrialized countries. Alongside the rising importance of emerging economics, their life insurance sectors are also drawing more attention. Its been four years since the life insurance sector was opened up for private players in India. The reasons that prompted the government to bring in reform in this sector are well known. While the public sector life insurance companies made enormous contribution in the spread of awareness about insurance , and expanded the market, it was recognized that their reach was still limited, the range of product offered restricted to the services to the consumer inadequ ate. It was also felt that the rapid economic growth witnessed in the 90s couldnt be sustained without a thriving insurance sector. Today, the private accounts f or nearly 20% of the market. The market share of the private players has to be s een in the context of this enlarged market. There has been a flurry of private p layers providing a wide range of innovation products, services and customized so lutions. Emerging markets-such as China, India, Mexico, and Russia- are home to some 86% of the worlds population. Collectively, they account for 23% of world ec onomic output. Yet, insurance business is underdeveloped in these markets. In fa ct, India as a country is under-insured. Only 35% of the 250 million insurable p opulation is insured. Exploiting the growth potential of emerging insurance mark et- India and China are in the spotlight. Both the countries currently attract a lot of attention due to their size, strong growth performance and favorable reg ulatory changes. To begin with, India and China are the most populous countries and both have sustained impressive economic growth in the last decade. Between 1 993 and 2003, annual real GDP growth averaged 8.9% in china and 5.9% in India. I nterestingly, both markets have gone through a similar period of nationalization of their insurance business, although China revoked state monopoly earlier than India. Calandro j, J flynn R (2005) studied that many insurance companies vigorously pu rsue top-line growth, even though it has the potential to develop unprofitably o ver time. The time lag(or tail) between when insurance is sold and when claims a re paid generates risks unique to insurance 38

companies. Furthermore, the insurance market is both mature and efficient (i.e. its level of completion is very high), which means that profitable opportunities are both rare and untenable unless protected by competitive advantage. There cu rrently no practical measure available ( of which the authors are aware ) at the business unit level to evaluate insurance premium growth in the face of the ind ustrys risk, impairing executives ability to assess segment opportunities (and haz ards), thus hampering strategies decision making. The purpose of this paper is t o introduce a practical measure developed by the authors called Underwriting Ret urn (UWR) which aims at helping to alleviate this situation. The paper introduce s UWR which was developed during the course and scope of the authors work in the insurance industry, and their research into applying value-based management to t hat industry. The paper finds that UWR is a practical measure that property and casualty executives can use at the business unit level to help quantify market s egments to grow, hold, harvest and abandon. A variety of strategies analysis too ls, such as the popular Boston Consulting Group matrix, are utilized today. In g eneral, the application of such tools is hampered by an imprecision of measureme nt but each can add a level of insight to executive resource allocation options. UWR can further aid insurance executive in strategic analysis by helping to quan tify in which segments to compete, and which ones to abandon. The paper demonstr ates the utility of the measure in an example based on an actual analysis. Anon (2005) studied all the aspects of the Indian insurance industry along with an outlook for potential developments. The report examines the trends in industr y, besides the competitive landscape offers a brief analysis on the main players in the industry. It contains an assessment based on PEST analysis, covering the relevant political, economic, social and technological factors that have implic ations for the development of the industry. The report also evaluates the indust ry within th Michael porter framework. It goes on to describe the competitive la ndscape and provides a comparative financial study of the major players in the i ndustry. Insurance constitutes an important and increasing proportion of the gro ss financial savings of the household sector in india. The private sector, in li fe as well as the non-life segments gained more prominent in the life insurance sector. The factors that have driven change incl ude: > Increasing Gross Financial Household Savings. > Deregulation in the India n Insurance Market. > Increase in dependency ratio However, dearth of new produc ts represents a major implication. 39

Sethi N (2005) studied the concept of banc assurance in India. Banc assurance ha s mostly been a phenomenal success and , although slow to gain pace, is now taki ng off across Asia, especially now that banks are starting to become more divers e financial institutions, and the concept of universe banking is being accepted. In India, the signs of initial success are already there despite the fact that it is completely new phenomenon. The factor and principles of why it is a succes s elsewhere exists in India, and there is no doubt that banks are set to become a significant distributor of insurance related products and services in the year s to come. Rao (2005) analyzed that the insurance industry has grown by 83 percent since th e opening up the sector. Remarking on the performance of the insurance industry, C S Rao, chairman, insurance regulatory & development authority, said public se ctor players have not suffered with the opening up of the sector. Insurance prem ium income has risen to Rs 82,415 crore (Rs 824.15 billion) in 2003-2004, agains t Rs 45,000 crore (Rs 450 billion) in 2000-01. Rao expects premium income in the life insurance sector to rise further by 15-16 percent and non-life insurance p remium by 14 percent in 2005-06. The growth comes on the back of healthy demand from the manufacturing sector. Kannan k.v (2006) reviewed in their study that the market potential for private insurance companies is found to be greater in the long run as most of the Indian s are of the opinion that, private insurance companies would be able to perform well in the future. The private and foreign insurance companies have too immedia te steps in appointing more number of agents and/or advisors in addition to the employees as it has found that agents are the best channel to reach the general public regarding selling of insurance products. The private and foreign insuranc e companies have to concentrate on the factors like prevention of loss, assured ret urns and long term investment. They can also focus on an insurance amount of Rs. 12 lakhs with money back policies. Hence, the market has potential. The private and foreign insurance companies that are taking immediate steps can tap it. Sasidharan Sanjeev (2006) studied that the insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. 40

Tracing the developments in the Indian insurance sector reveals the 360-degree t urn witnessed over a period of almost two centuries. Athma Prashanta(2007) reviewed that in globalization policy, insurance company f ace a dynamic global business environment. The existing insurers are facing chal lenges from nontraditional competitors who are entering into the retail market w ith new approaches and through new channels. While quality of service is the mai n influencing factor in the finance market, in the insurance market, product att ributes are the main factors that influence the success of insurance companies. Though, there has been growth in life insurance industry over the past few years , comparatively, insurance penetration in India has not increased in spite of th e considerable growth potential of Indian life insurance market. With liberaliza tion, many insurance players have entered this field from the year 2000, and the task before them now is to identify what factors influence in decision-making. In this context, this study assumes importance. The main objective of the paper is to identify the factor s which the consumers take into consideration before s electing life insurance products and determine the extent to what these factors are taken into consideration for choosing the life insurance products. This rese arch is carried out by collecting primary data from 200 policyholders of Life In surance Corporation on India through self-structured questionnaires. The sample consists of 100 policyholders from urban area and 100 policyholders from rural a rea. C2 test is employed to test if there is any association is used to find out which factor has more influence. Both, product and non-product attributes have been found to be important in selecting a policy but they have been rated differ ently. Rating is different in urban and rural areas. Hsieh An (2008) investigated the relationship between customer perception of pub lic relations (PR) and customer loyalty to test for the moderating role of brand image in that relationship. Data were collected in a survey of customers of the insurance industry in Taiwan, using a questionnaire designed on the basis of fo cus-group discussions with 30 consumers. Hierarchical regression analysis of dat a from 367 respondents was used to test two hypotheses. The results show that co nsumers perception of an organizations PR practice is an antecedent of loyalty. Th e impact of public relation perception (PRP) on customer loyalty is stronger and more significant when the brand image is favorable. The effect of PRP on custom er loyalty is 41

negligible. This study extends previous research by examining the moderate of br and image. Further research is indicated, to identify the key moderators of the driving force of PR in relation to customer relationship marketing. This paper p roposes an original eight-item scale for the assessment of customer PRP activity , which can be applied in practice to measure its effectiveness under different brand-image conditions. Andreassen Tor (2008) studied the impact of customers perception of customer serv ice (bad/good) on variables that are known to drive revenue, i.e. customer satis faction, perceived relative attractiveness, and commitment. Data were collected through a survey among bank customers. Two groups were sampled: customers who ha ve experienced good or bad customer service. The hypotheses were tested by apply ing structural equation modeling and running two group analysis using the PLS an d LISREL softwares. Customers that experience bad customer service do take into a ccount the same variables in their evaluation as do customers that experience go od customer service. They do however, put different weights on every factor in t he evaluation process. Also the strength of the relationship between the variabl es seems to differ. Typically, analyses showed that customers experiencing bad c ustomer service tend to consider more thoroughly all aspects of the service; the relationships between the variables were stronger and the explained variance of each construct higher, than in the group of customers experiencing good custome r service. However, the paths are not different across the groups. The paper has only tested the model and hypothesis in one industry. Future research should te st the same model using different industries reflecting different customer invol vement levels. Practical implications from this study, service managers can lear n that investing in customer service in ongoing customer relations is the right t hing to do as it is linked to customer equity through customers commitment to the firm. Second, as customer service in such relationships drives perceived relativ e attractiveness, saving the bottom line by cutting back on the human side of th e customer interaction, may harm the firms competitive position in the marketplac e. 42

CHAPTER-3 NEED, SCOPE & OBJECTIVES OF THE STUDY 43

NEED SCOPE & OBJECTIVE OF THE STUDY NEED Life insurance is chiefly a risk management tool, meant to offer financial prote ction to your dependents in the unfortunate event of your death. But in India, a s the most other developing market, life insurance has come to present more than just risk cover. This particular study is conducted on the topic titled to study customer perception regarding Birla sun life insurance company. The aim of this research study is to know about life insurance. It is done to know the banc ass urance in India. Banc assurance has mostly been a phenomenal success and, althou gh slow to gain pace, is now taking across Asia, especially now that banks are s tarting to become more diverse financial institutions, and the concept of univer sal banking is being accepted. In India, the signs of initial success are alread y there despite the fact that it is a completely new phenomenon. SCOPE The study is restricted to Navi-Mumbai region only. The study also analyses the preferences regarding different life insurance policies of Birla-sun life insura nce. For this study 100 respondents of Navi-Mumbai are chosen. Now days there ar e lot of private companies in market so its important to know what motivates the customer to buy the policy. Birla sun life is the fastest growing private insura nce company in India. It determines market share of the various private companie s in India. OBJECTIVES To determine and analyze the Market Potential of the Birla Sun Life Insurance Co mpany. To determine whether the customers are satisfied with the policies of the company. To know the the customer awareness regarding the Birla-sun life insura nce and its products. To study and determine the competitor position in the mark et. To know the future plans of the people for buying the policies. Proper under standing and analysis of life insurance industry. Conduct market survey on a sample selected from the entire population and derive d opinion on that research 44

CHAPTER-4 RESEARCH METHODOLOGY 45

Research methodology Research means a search for knowledge or gain some new knowledge and methodology can properly refer to the theoretical analysis of the methods appropriate to a field of study or to the body of methods and principles particular to a branch o f knowledge. Research Design : A research design is the arrangement of condition s for the collections and analysis of data in a manner that aims to combine rele vance to research purpose with economy in procedure. Universe The universe of th e study is Navi-Mumbai. Sample Unit The sample unit pertaining to the study is 1 00 respondents of Navi-Mumbai region. Sample Size The sample size of 100 served the purpose of the study. Sample Method The sampling method used is non-probabil ity convenience sampling Methods of data collection Data collection The word data means any raw information, which is either quantitative or qualita tive in nature, which is of practical or theoretical use. The task of data colle ction begins after a research problem has been defined and research design chalk ed out. While deciding about the method of data collection, the researcher shoul d keep in mind that there are two types of data primary and secondary. Primary data This is those, which are collected afresh and for the first Time, and thus happe n to be original in character. There are many ways of data collection of primary data like observation method, interview method, through schedules, pantry Repor ts, distributors audit, consumer panel etc. The Team Managers and employees of b oth the Department were consulted to get information about procedure of both the online and off line share trading. But the method used by us for the primary da ta collection was through questionnaires. 46

Questionnaire method For the collection of primary data I used questionnaire method. A formal list of questions, which are to be asked, is prepared in a questionnaire and questions are asked on those bases. There are some merits and demerits of this method. The se as under: Merits: 1. Low cost even when universe is large. 2. It is free from bias of interviewer. 3. Respondents have proper time to answer. 4. Respondents who are not easily approachable can also be reachable. 5. Large samples can be m ade. Secondary data These are those data, which are not collected afresh and are used earlier also a nd thus they cannot be considered as original in character. There are many ways of data collection of secondary data like publications of the state and central government, reports prepared by researchers, reports of various associations con nected with business, Industries, banks etc. And the method, which was used by u s, was with the help of reports of the company. Sample Size I have met 250 people, to know about their perception regarding companies and th ere policies after that I have taken 25 People they have fill up the questionnai re and given response. 47

LIMITATIONS OF INSURANCE Lack of awareness among the people This is the biggest limitation found in this sector. Most of the people are not aware about the importance and the necessity of the insurance in their life. They are not aware how useful life insurance can be for their family members if something happens to them. Perception of the peo ple towards Insurance sector People still consider insurance just as a Tax savin g device. So today also there is always a rush to buy an Insurance Policy only a t the end of the financial year like January, February and March making the othe r 9 months dry for this business. Insurance does not give good returns Still tod ay people think that Insurance does not give good returns. They are not aware of the modern Unit Linked Insurance Plans which are offered by most of the Private sector players. They are still under the perception that if they take Insurance they will get only 5-6% returns which is not true nowadays. Nowadays most of th e modern Unit Linked Insurance Plans gives returns which are many times more tha n that of bank Fixed deposits, National saving certificate, Post office deposits and Public provident fund. Lack of awareness about the earning opportunity in t he Insurance sector People still today are not aware about the earning opportuni ty that the Insurance sector gives. After the privatization of the insurance sec tor many private giants have entered the insurance sector. These private compani es in order to beat the competition and to increase their Insurance Advisors to increase their reach to the customers are giving very high commission rates but people are not aware of that. Increased competition Today the competition in the Insurance sector has became very stiff. Currently there are 14 Life Insurance c ompanies working in India including the LIC (life insurance Corporation of India ). Today each and every company is trying to increase their Insurance Advisors s o that they can increase their reach in the market. This situation has created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has became very- very difficult. 48

CHAPTER-5 DATA ANALYSIS AND INTERPRETATION 49

DATA ANALYSIS AND INTERPRETATION 1.Which Birla life plan do you have? Table 5.1 : Type Of Plan Types of plan Life insurance plan Health insurance plan Retirement plan Total No of respondent 68 10 22 100 Percentage 68% 10% 22% 100% Figure. 5.1 : Type Of Plan Analysis & Interpretation: The objective of first question was people having an account with BSLI are having which type of plan. In the survey of 100 people it was found that 68% have life insurance plan, 22% have retirement plan and 10% we re having health insurance plan. 50

2.Are you satisfied with the plan you have? Table 5.2 : Satisfaction With The Pl an People satisfied with plan Yes No Total No of respondent 72 28 100 Percentage 72% 28% 100% Figure 5.2 : Satisfaction With The Plan Analysis & Interpretation: The objective of second question was to find out that how many people are satisfied with the plan. In the survey of hundred people it was found that 72% people are satisfied with the plan while 28% people are not satisfied with the plan. 51

3.Are you satisfied with the service provided by the company about new schemes a nd plans Table 5.3 : Satisfaction With The Services Of The Company Are people satisfied with service provided by company Yes No Total No of respondent Percentage 82 18 100 82% 18% 100% Figure 5.3 : Satisfaction With The Services Of The Company Analysis & Interpretation: The objective of third question was to find out wheth er people are satisfied with the services provided by the company. In the survey it was found that 82% people are satisfied with the services provided by the co mpany while 18% people are not satisfied with the services. 52

4.Are you interested to make more investments in BSLI? Table 5.4 : People Want To More Investment In Bsli People want to more investmen t in BSLI Yes No Total No of respondent 67 33 100 Percentage 67% 33% 100% Figure 5.4 : People Want To More Investment In Bsli Analysis & Interpretation: The objective of fourth question was to find out that do people want to invest more money. It was found that 67% people want to inves t more money while 33% people dont want to invest more money. 53

5.Number of people have other insurance plan apart from BSLI Table 5.5 : People Have Other Insurance Plan Apart From Bsli People have other insurance plan apart from BSLI Yes No Total 78 22 100 78% 22% 100% No. of people Percentage Figure 5.5 : People Have Other Insurance Plan Apart From Bsli Analysis & Interpretation: The objective of fifth question was whether people ha ve insurance plan apart from BSLI. In the survey it was found that 78% people ha ve insurance plan other than BSLI while 22% dont have any other plan. 54

6.Percentage share of different companies in insurance sector. Table 5.6 : Share of different companies Name of different companies Life insurance company Birla Sun Life Insurance Bajaj Aliyanz ICICI Other Total Percentage 60% 9% 11% 8% 12% 100% Figure 5.6 : Share of different companies Analysis & Interpretation: The objective of this study is to find out the percen tage share of different companies in the insurance sector. it was found that 60% is occupied by LIC,9% by BSLI,11% by Bajaj aliyanz,8% by ICICI and 12% by other companies. 55

7.Market share of private companies. Table 5.7 : Market share of private compani es List of companies ICICI pru Bajaj Alliaz SBI HDFC standard Birla sun life ins urance Reliance life Max new York Tata AIG Aviva Kotak Mahindra Met life ING vys ya Shriram life Other Total Percentage 22.1% 13.8% 9.8% 7.7% 7.0% 8.0% 8.0% 7.0% 3.1% 3.6% 5.3% 2.1% 1.1% 1.1% 100% 56

Figure 5.7 : Market share of private companies Analysis & Interpretation: The objective of this study is to find out the market share of different companies in the insurance sector. It was found that icici p ru is having the maximum share that is 22.1%. 57

CHAPTER-6 FINDINGS OF THE STUDY 58

FINDINGS To be successful in marketing of insurance products, the entire business scenari o has to be taken into account. During the study to be found that majority of pe ople are aware of life insurance sector. During the survey it was observed that major source of information for consumer are television and newspaper and least preference are given to magazines, agents and friends. Attractive schemes and br and image are the most important factor that influences the buying behavior of t he consumers. Majority of respondents will shift to any other insurance company. People are not satisfied with the opted insurance. It was found that the reason for the dissatisfaction of consumer is high premium, delay in claim settlement and poor after sale service. So to achieve a greater insurance penetration, insu rance sector companies have to create a more vibrant and competitive industry, w ith greater efficiency, choice of products and value for customers. 59

CHAPTER-7 SUGGESTIONS 60

SUGGESTIONS 1) Information regarding new product should be provided to the customers. 2) The company should find out the no. of people who are not having any of the i nsurance plans through an intensive market research and motivate them to get ins ured. 3) At some level Company should provide information to the customers about the charges of the policy. 4) Company should target each and every class of the society. 5) Charges should be low of the policies. 6) Annual premium should be reasonable. 7) BSLI Company should work in systematic way. 61

CHAPTER-8 LIMITATIONS 62

LIMITATIONS Some of the respondents were not cooperative. There are chances of biased information provided by the respondents. As the sample size is small compared to the total population, there fore there cant be full accuracy. The time was limited. Area was limited. 63

CHAPTER-9 CONCLUSION 64

CONCLUSION The market potential for private insurance companies is found to be greater in t he long run as most of the Indians are of the opinion that, private insurance co mpanies would be able to perform well in the future. The private and foreign ins urance companies have to take immediate steps in appointing more number of agent s and/or advisors in addition to the employees as it has been found out that age nts are the best channel to reach the general public regarding selling of insura nce products. The private and foreign insurance companies have to concentrate on the factors like 'Prevention of Loss', 'Assured Returns' and 'Long term Investm ent'. They can also focus on an insurance amount of Rs. 1 2 lakhs with 'money ba ck policies'. Hence, the market has potential. The private and foreign insurance companies that are taking immediate steps can tap it easily & rapidly. 65

CHAPTER-10 RECOMMENDATIONS 66

RECOMMENDATIONS 1) Even though most of the policy holders are satisfied with policies, plans the y have but some new attractive insurance plans should be introduce to bind them not to switch over to other companies insurance plans. 2) The company should fin d out the no. of people who are not having any of the insurance plans through an intensive market research and motivate them to get insured. 3) Leveraging techn ology to service customers quickly, efficiently and conveniently. 4) Developing and implementing superior risk management and investment strategies to offer sus tainable and stable returns to our policyholders. 5) Company should target each and every class of the society 6) Company should provide full information to the customers before targeting so they can take interest. 67

CHAPTER-11 BIBLIOGRAPHY 68

BIBLIOGRAPHY Books : y Kothari C.R. (1990) Research Methodology : Method and Techniques, Wish va Parkashan, New Delhi. PP115-117 y Bodie. Z, Kane. A & Marcus. J : Essentials of Investments PP242-243 Websites : y y y y y http://www.economywatch.com/indianeconomy/indian-insurancesector.html www.birlasunlife.com/birlasunlife/insurance/bsli.../index5.aspx http ://www.indianmba.com/Occasional_Papers/OP85/op85.html http://www.banknetindia.co m/finance/insure2011.htm http://www.financialexpress.com/news/the-indian-insuran ce-sector-ii/181428/ Journals : y Lect. D.ramkumar(2003), Relationship Marketing The new tantra for li fe insurance sector. Department Of Management Studies, N.M.S.S. Vallaichamy Nadir College, Nagamalai, Madurai 625019 available at http://www.google.co.in/interst itial?url=http://www.indiaschools.com/marketing_029.ht m last accessed on 07-082009. y Dr. Ch.rajesham (2004), changing scenario of india insurance sector, depar tment of commerce & Business Management, University P G college, Kakatiya Univer sity Khammam, Andhra Pradesh available at http://www.insuranceinstituteofindia.c om/insuranceinst/publication/uploads/journal-janjun-04/chapter10..pdf last acces sed on 14-08-2009 y J.Mehra (2005), innovations in life insurance industry, the fi nancial express, new delhi available at http://www.financialexpress.com/news/inn ovations-in-life-insurance-industry last accessed on 15-08-2009. 69

CHAPTER-12 ANNEXURE 70

Questionnaire Name:............................... Age:.. Occupation:.. Ques.1 Which Birla Sun do you have? Health Retirement Life Health Retirement Life Ques.2 Are you satis fied with the Insurance plan you have? (a) Yes (b) No Ques.3 what attract you towards Birla Sun Life Plans? (a) (b) (c) (d) Ques.4 Are you satisfied with the services provided by the company Regarding new plans and schemes? (a) Yes (b) No Ques.5 Are you interested to make more investments in Birla Sun Life ? (a) Yes ( b) No Ques.6 Have you any other Insurance Plan apart from Birla Sun Life? (a) Yes (b) No Ques.7 If yes, then of which Life Insurance Company? (a) LIC (c) Birla Sunlife ( e) Others (b) Bajaj Allianz (d) Reliance 71

Ques.8 If you get any attractive plan than are you ready to switch over? (a) Yes (b) No Ques.9 If you get any attractive plan than are you ready to switch over? (a) Yes (b) No

Suggestions: 72