EXECUTIVE SUMMARY

This project has been a great learning experience for me; at the same time it gave me enough
scope to implement my analytical ability. Tata Group is one of the India's largest and most
respected business groups. Tata Group's name is synonymous with India's industrialization.
Tata AIA Insurance Solutions is one of the leading insurance companies that provide both life
insurance as well as general insurance. This pioneer company is a joint collaboration between
the American International Group, Inc. (AIA) and Tata Group. They own the company in the
ratio of 26:74. It is a leading financial institution that has carved a niche for itself all over the
world. Tata AIA Insurance Company is having different insurance policies. At the end of the
project people will be knowledgeable about various insurance organizations and different
products taking into considerations hundred sample sizes in Delhi. Project is on the market
potential study of Tata AIA Insurance Company in Delhi. To get to know a questionnaire has
been prepared which contains open ended and close ended questions. Firstly pilot study has
been done through hundred questionnaires. For collecting the data field survey method,
personal interview technique has been used. Secondary data has been collected from the
company. The data collected are represented into suitable tabular forms for drawing inferences.
Quantitative techniques like averages, percentages, range, two-way tables, chi- square tests
analysis has been applied as per the requirement. The level of preference, perception of the
customers about the product and company were identified by means of a scoring scheme. For
the representation of data various charts and graphs are used as per requirement. .

Overview of Insurance Industry as a whole

Indian insurance sector is poised to mark great progress in the years the come. Over the
past few years, many foreign insurance companies have ventured into the Indian
landscape in order to harness the immense untapped latent potential of this industry.
Moreover, the favourable regulatory environment ensures stability and fair play in the
entire market.

1818 saw the advent of life insurance business in India with the establishment of the
Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In
1829, the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three
decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and
Empire of India (1897) were started in the Bombay Residency. This era, however, was
dominated by foreign insurance offices which did good business in India.

In 1914, the Government of India started publishing returns of Insurance Companies in

India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to
regulate life business. In 1928, the Indian Insurance Companies Act was enacted to
enable the Government to collect statistical information about both life and non-life
business transacted in India by Indian and foreign insurers including provident insurance
societies. In 1938, with a view to protecting the interest of the Insurance public, the
earlier legislation was consolidated and amended by the Insurance Act, 1938 with
comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there
were a large number of insurance companies and the level of competition was high.
There were also allegations of unfair trade practices. The Government of India, therefore,
decided to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector
and Life Insurance Corporation came into existence in the same year. The LIC absorbed
154 Indian, 16 non-Indian insurers as also 75 provident societie-245 Indian and foreign
insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.

Key Statistics

Indian life insurance sector collected new business premiums worth 11,742.7
crore (US$ 1.92 billion) for April-May 2013, according to data from IRDA. Life
insurers collected 1,07,010.7crore (US$ 17.5 billion) worth of new premiums
for the financial year ended March 31, 2013.

Meanwhile, the general insurance industry grew by 19.6 per cent in April-May
period of FY14, wherein the non-life insurers collected premium worth
13,552.46 crore (US$ 2.21 billion).

Insurance sector in India along with banking services add up to a significant portion of
India's Gross Domestic Product (GDP). Insurance is a big and one of the most rapidly
growing sectors in India. Its the prime reasons why leading market players are attracted
to the Indian insurance market for business expansion. The Confederation of Indian

Industry indicates that it has recorded instant and steady growth with a record growth rate
of 32% to 34%. India has the largest number of life insurance policies in the world which
is great news for the leading insurance companies in India. Indias state owned life
insurance corporation (LIC) leads the life insurance sectors in India.
Around 80% of Indian population doesnt have life insurance coverage. Amongst these
80% people most of them dont have any kind of life coverage, while some of them do
have some sort of health insurance and other non-life insurance policies. People, who
dont have insurance coverage in India, belong to socially and economically weaker
strata with lack of pension and social security systems. This is a great opportunity to the
insurers to expand their reach throughout all the strata of Indian society.
Indian insurance sector along with the banking sector plays a vital role in building Indias
GDP. GDP, gross domestic product of a country is the market value of all the officially
recognized products and services within the country in a specific time span. Gross
domestic product per capita is an indicator of the overall growth of a country and the
trend in its regular standard of living. Personal income is not considered while measuring
GDP of a country. According to the 10th nominal of 2011, India has a GDP of $1.847
trillion. As of 2012, Indias GDP has recorded a 5.3% of increase rate.
While considering the contribution of insurance in Indias GDP, the results are definitely
positive. As mentioned before, insurance sector along with the banking sector contributes
to the total GDP of India. Both these sectors add around 7% of the total GDP of India.
The gross premium collection of India is nearly 2% of gross domestic product. As a

matter of fact, the funds available with LIC as investments add up to 8% of Indias gross
domestic product.

Profile of the organization

I. Tata AIA Life Insurance Company Ltd.
Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture company,
formed by Tata Sons and AIA Group Limited (AIA). Tata AIA Life combines Tatas preeminent leadership position in India and AIAs presence as the largest, independent listed
pan-Asia life insurance group in the world spanning 16 markets in Asia Pacific. Tata
Sons holds a majority stake (74 per cent) in the company and AIA holds 26 per cent
through an AIA Group company. Tata AIA Life Insurance Company Limited was
licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.
The company provides non-life insurance solutions to individuals, groups and corporate
houses in India. The company offers a range of general insurance covers that are
structured under commercial and consumer lines. Commercial lines cover energy,
marine, property and several specialized financial covers, while consumer lines offer a
range of general insurance products such as insurance for automobile, home, personal
accident, travel, health and casualty. The company's products are available through
various channels of distribution like agents, brokers, banks and direct channels like telemarketing, e-commerce, website, etc. The company has more than 40 branches in 35
cities in India.
The total premium earned for the half year ended September 30, 2010 was Rs. 3,213
million. The profit before tax for the same period is Rs. 168 million. A total of 54,116
claims were made during the period out of which 34,529 claims were settled and 1,126
claims were rejected.

II. Life Insurance Corporation (LIC)

The Life Insurance Corporation of India popularly known as LIC of India was
incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign
companies. It was established 52 years ago with a view to provide an insurance cover
against various risks in life. The luminaries who spearheaded this move at that time
visualized an entity that will provide life insurance to Indians, especially the vast rural
people, at an economical cost and channel the savings for the betterment of the nation. It
is the largest life insurance company in India and also the countrys largest investor. It is
fully owned by the Government of India and headquarter is Mumbai.
Today LIC function with 2048 fully computerized branch offices, 100 divisional offices,
7 Zonal offices and the corporate office. LICs wide area Network covers 100 divisional
offices and connects all the branches through a Metro area network. LIC has tied up with
some Banks and service providers to offer on- line premium collection facility in selected
cities. LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line kiosks and IVRS, info centers have been commissioned
at Mumbai, Ahemdabad , Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and
many other cities. With vision of providing easy access to its policyholders, LIC has
launched its SATELLITE SAMPARK offices. The digitalized record of the satellite
offices will facilitate anywhere to serve and other convenience in the future. LIC has
crossed many milestones and has set unprecedented performance records in various
aspect of life insurance business.

History of the Organization

Tata Group
The Tata group comprises over 100 operating companies in seven business sectors:
communications and information technology, engineering, materials, services, energy,
consumer products and chemicals. The group has operations in more than 80 countries
across six continents, and its companies export products and services to 85 countries.

The total revenue of Tata companies, taken together, was $100.09 billion (around
Rs475,721crore) in 2011-12, with 58 percent of this coming from business outside India.
Tata companies employ over 450,000 people worldwide. The Tata name has been
respected in India for more than 140 years for its adherence to strong values and business
ethics.

Every Tata company or enterprise operates independently. Each of these companies has
its own board of directors and shareholders, to whom it is answerable. There are 32
publicly listed Tata enterprises and they have a combined market capitalisation of about
$93.18 billion (as on May 16, 2013), and a shareholder base of 3.8 million. The major
Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata
Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata
Communications and Indian Hotels.

AIA Group Ltd.

AIA Group Limited and its subsidiaries (collectively "AIA" or "the Group") comprise the
largest independent publicly listed pan-Asian life insurance group. It has operations in 16
markets in Asia-Pacific wholly-owned branches and subsidiaries in Hong Kong,
Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia,
Taiwan, Vietnam, New Zealand, Macau, Brunei, a 92 per cent subsidiary in Sri Lanka
and a 26 per cent joint venture in India.

The business that is now AIA was first established in Shanghai over 90 years ago. It is a
market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and
holds leading positions across the majority of its markets. It had total assets of
US$134,439 million as of 30 November 2012.

AIA meets the savings and protection needs of individuals by offering a range of
products and services including retirement savings plans, life insurance and accident and
health insurance. The Group also provides employee benefits, credit life and pension
services to corporate clients. Through an extensive network of agents and employees
across Asia-Pacific, AIA serves the holders of more than 25 million individual policies
and over 13 million participating members of group insurance schemes.

AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong
Limited under the stock code 1299 with American Depositary Receipts (Level 1)
traded on the over-the-counter market (ticker symbol: AAGIY).

AIG to AIA
The company was set up as a joint venture between the leading Indian conglomerate Tata
group and the leading international insurance organization American International Group
(AIG). It was licensed to operate in India on February 12, 2001, and started operations on
April 1, 2001. Since its inception, Tata Sons owns 74 percent stake in joint venture, with
the remaining 26 percent share held by AIA, a 100 percent owned subsidiary of AIG at
that time.
In 2010, AIA went public in Hong Kong and raised $20.51 billion through an initial
public offering (IPO). The IPO was the third largest globally at the time of listing, after
which AIA emerged as the largest independent publicly listed Pan-Asian life insurance
group in the world. AIA has a strong heritage and fundamentals of over 90 years in the
Asian insurance market. It has wholly-owned main operating subsidiaries or branches in
14 markets in Asia Pacific.
To create a uniform identity of AIA owned companies post this IPO, the two promoters
of this joint venture have chosen to change the companys name to Tata AIA Life.
However, the company makes this transition just in its name; its single-minded focus in
protecting the financial well-being of its customers remains unchanged.

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Life Insurance Corporation (LIC)

The Oriental Life Insurance Company, the first corporate entity in India offering life
insurance cover was established in Calcutta in 1818 by Bipin Behari Das gupta and
others. Europeans in India were its primary target market, and it charged Indians heftier
premiums. The Bombay Mutual Life Assurance Society, formed in 1870, was the first
native insurance provider. The first 150 years were marked mostly by turbulent economic
conditions. It witnessed, India's First War of Independence, adverse effects of the World
War I and World War II on the economy of India, and in between them the period of
worldwide economic crises triggered by the Great depression. The first half of the 20th
century also saw a heightened struggle for India's independence. The aggregate effect of
these events led to a high rate of bankruptcies and liquidation of life insurance companies
in India. This had adversely affected the faith of the general public in the utility of
obtaining life cover.
The Life Insurance Act and the Provident Fund Act were passed in 1912, providing the
first regulatory mechanisms in the Life Insurance industry. The Indian Insurance
Companies Act of 1928 authorized the government to obtain statistical information from
companies operating in both life and non-life insurance areas. The subsequent Insurance
Act of 1938 brought stricter state control over an industry that had seen several
financially unsound ventures fail. A bill was also introduced in the Legislative Assembly
in 1944 to nationalize the insurance industry.
LIC owns the following subsidiaries:

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Life Insurance Corporation of India International: This is a joint venture

offshore company promoted by LIC which commenced operations in July, 1989
with the objectives of offering US$ denominated policies to cater to the insurance
needs of NRIs and providing insurance services to holders of LIC policies
currently residing in the Gulf.

LIC Nepal: A joint venture company formed in 2001 with the Vishal Group of
Industries, Nepal.

LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group of
Companies, Sri Lanka.

LIC Housing Finance: Incorporated in 19th June 1989, its main objective is to
provide long term finance for construction or purchase of houses or apartments. It
has a Dubai office.

LICHFL Care Homes: A wholly owned subsidiary of LIC Housing Finance, it

builds and operates "Assisted Community Living Centers" for senior citizens.

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Competition Information
Both insurance companies fully support the development and operation of competitive
open markets and shall promote the liberalization of trade and investment in each country
and market in which it operates. Specifically, no Tata and LIC company or employee
shall engage in restrictive trade practices, abuse of market dominance or similar unfair
trade activities.
Both companies shall market the companys products and services on their own merits
and shall not make unfair and misleading statements about competitors products and
services. Any collection of competitive information shall be made only in the normal
course of business and shall be obtained only through legally permitted sources and
means. As LIC is a public company and Tata AIA is a private company and both belong
to the same industry profile their competitors are also same.
Except for Tata AIA Life all the other Insurance Companies have their tie ups with
different banks Tata AIA Life doesnt have tie up with any bank in relation to selling of
policies, and had its approximately 85% business from BA model and rest from alternate
model.
In the segment of Pension and Group Business also, LIC has achieved a growth rate of 42
percent in the number of lives covered. In spite of the intensifying competition, the
market share of LICs Pension and Group Business has shown an increasing trend and is
expected to go up further.
LIC is on a new growth trajectory surpassing its own past records. LIC has issued over
one crore policies. It has crossed the milestone of issuing1,01,32,955 posting a healthy
growth rate of 16.67 percent.

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The total assets of the Tata AIA has increased by 15 percent to Rs14,519 crore from
Rs12,622 crore. As on March 31, 2012, the paid-up capital of the company stood at
Rs1,954 crore.
LIC is ranked first among the top 10 life insurance companies in India and Tata AIA is
ranked ninth.
1. Life Insurance Corporation of India (LIC)
2. ICICI Prudential Life Insurance
3. Reliance Life Insurance
4. Bajaj Allianz Life Insurance
5. Birla Sun Life Insurance
6. SBI Life Insurance
7. Max Life Insurance
8. HDFC Standard Life Insurance
9. Tata AIA Life Insurance
10. ING Vysya Life Insurance

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S.W.O.T Analysis of the Organization

Tata AIA Life Insurance Company Ltd.
Strengths are:

Customized Insurance Solutions for customers

State of Art I.T Infrastructure

Products with emphasis on social aspects

Global Exposure with Expertise in Asian Markets in over 15 countries

Weaknesses are:

Less penetration in rural areas

Small Agent Strength as compared to competitors

Cases of fraud agents have caused problems to the brand

Opportunities are:

Growing rural market

Earning Urban Youth

Threats are:

Increasing rates of interest

Increasing costs

Unexpected problems

Growing competition and lower profitability

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Life Insurance Corporation (LIC)

Strengths are:

Largest state-owned life insurance company in India, and also the country's
largest investor.

LIC has a strong and very well developed distribution network.

It has a large product portfolio and claim settlement is easier to get.

According to The Brand Trust Report, LIC is the 8th most trusted brand of India

Weaknesses are:

Its employees and other staff are lethargic and least motivated to render prompt
and sincere customer service.

After sales customer grievance redressal mechanism is inefficient.

It has an image of a Government agency and hence lacks innovation.

Being a Government agency, red tape and bureaucracy causes problems.

Opportunities are:

Use of Technology to provide effective services to cater to urban population.

Government Schemes implementation.

Product innovation.

Threats are:

Economic crisis.

Entry of new NBFCs in the sector.

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Entry of private and foreign companies.

Varying Government policies.

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Objectives of study
The main objective of this study is to compare saving plans of Tata AIA and LIC and
other objectives of the study are as follows.

To know the customer behavior towards their Insurance company.

To know on what parameters both companies differ.

To understand satisfaction level of customers of Tata AIA and LIC.

To analyze the return patterns of both the companies.

To know customer benefits regarding different saving plans offered by both the
companies.

To understand the quality of services provided by both the companies to their

customers.

To know customer satisfaction towards services provided by advisors of their

insurance company.

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Scope of the Study

Scope of the subject is very vast as it cover the various aspects of saving plans offered by
Tata AIA and LIC which consist of the certain terms and condition which are present in
the given policies, though the area is restricted to Delhi and the survey is conducted only
for 50 respondents and the study covers the following topics as mentioned below.
This project helps in understanding the various aspects of saving plans offered by both
the insurance companies i.e. the terms and conditions related to policies, mode of
payment, level of return, amount of premium, riders available.
This study also deals with the services provided by advisors, services provided by the
insurance company. Further this study can be useful for the companys advisors to
improve their performance. It is also helpful to both the companies to improve their
products offered by them to attract more customers.

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Research Methodology
Data
Data are values of qualitative or quantitative variables, belonging to a set of items. Data
in computing are often represented by a combination of items organized in rows
and multiple variables organized in columns. Data are typically the results of
measurements and can be visualized using graphs or images. Data as an abstract concept
can be viewed as the lowest level of abstraction from which information and then
knowledge are derived. Raw data, i.e., unprocessed data, refers to a collection
of numbers, characters and is a relative term; data processing commonly occurs by
stages, and the "processed data" from one stage may be considered the "raw data" of the
next. Field data refers to raw data collected in an uncontrolled environment. Experimental
data refers to data generated within the context of a scientific investigation by
observation and recording.
Types of data
Primary data: Data that has been collected from first-hand-experience is known as
primary data. Primary data has not been published yet and is more reliable, authentic and
objective. Primary data has not been changed or altered by human beings; therefore its
validity is greater than secondary data.
Secondary data: Data collected from a source that has already been published in any
form is called as secondary data. The review of literature in any research is based on
secondary data. Mostly from books, journals and periodicals.
In the report, both primary and secondary data is used. Primary data is the questionnaire
filled by various respondents and secondary data is gathered from net and book.

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Limitations of the study

The limitations of study are as follows:

The sample size of only 50 was taken from the large population for the purpose of
study, so there can be difference between results of sample from total population.

Some respondents were reluctant towards giving accurate information while

filling questionnaire.

There is lack of prior research studies on the topic.

There is lack of sufficient information from both the companies.

Since the survey was limited to 50 respondents it is rather difficult to give a

precise conclusion.

As the time devoted by the respondent was less so it becomes hectic.

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