EXECUTIVE SUMMARY

OBJECTIVES:

• To study the awareness and attitude of users towards SBI LIFE INSURANCE.

• To find out the socio economic variables that influences the insuring public to take up

the policies.

• To find the advertisement effectiveness and more attractive media.

• To find satisfaction level of insuring public about services provided by SBI LIFE

INSURANCE.

• To examine how for the expectations of policy holders are fulfilled by SBI LIFE

INSURANCE.

FINDINGS

• That data shows that 50% of respondents are satisfied with SBI services. 16% are

neutral.

• The data shows that 36% are saying that SBI life insurance is good and 8% of

respondents are saying it is average.

• 68% of respondents are saying that they choose SBI Life Insurance in future and 6%

are saying that they are saying no.

1
RECOMMENDATIONS

• It is observed that many of the people are in between the income group between

100000-300000. So, it is important to focus on this income level group.

• The company should mainly focus on business people as they are more in number

observed n this survey

• Increase in the advertisement will increase the consumers

2
 INTRODUCTION

“Insurance is one of those great movements which make benevolent and beneficent

contribution towards human happiness. It contributes to the internal and international;

stability, peace and security in a planet poisoned with discord, nattered and jealousy.

Insurance may be compared to a sizable umbrella which protects individually and institutions

against the rainy day, mostly unexpected and unfortunate. It signifies prudence of Human

beings in protesting themselves against the odds of life. It renders signal service not only to

the individual but to the community also through its manifold branches and multifarious

activities.

LIFE INSURANCE AND SOCIAL SECURITY

According to Darwin Kingsley “ Life insurance is a great social compact which merges the

individual into the mass and places behind the frailty of man, standing alone, the

immeasurable strength of man standing together”.

In case of accidental death or disability, the insurance policy serves as a true helper, and a

friend indeed. It saves the family from financial ruin and relieves the country of the cries of

helpless persons rendering the air. Against voluntary assumed small ands certain expense in

the form of Premia, definite sum is available when the contingency insured against becomes

a reality. Certainty is substituted for Uncertainty. Of course none knows in advance who is

actually going to suffer. A veil of uncertainty hangs over their heads. Therefore life

3
insurances can be describes thus “ There is nothing more uncertain than life and nothing

more certain than life insurance.

In fact, “Life insurance is a husband’s privilege, a wife’s right, and a child’s claim”. It

promises a decent living to the nation which now leads a parody of life of chill. Penury,

semi-starvation, filth, disease and poverty of incredible dimensions. “ The importance of life

assurance to society is every where, its strengthening influenced upon the sinews of social

life, the solidity its imparts to all domestic institutions, the protection it affords to the laborers

and recreation of existence, the comfort it brings to the sacred fire side of home, the relief it

pours out so abundantly upon the bereaved and suffering; the countless benefits it scatters

along the pathway of life, the blessing it reserves for future of sorrow; All these are more

truly perceived and more warmly appreciated than ever they were before. Thus insurers

offers varied services for social security measures and stabilize public relations.

INSURANCE

Insurance is not necessarily an investment from which one expects to get one’s money

back,nor it is gambling. A gambler takes risks, while insurance offers protection against risks

that already exist.

Insurance is a way to share risk with other.

TYPES OF INSURANCE:

Insurance is mainly protection against future loss. It can be better described as promise of

reimbursement in any case of loss. Insurance are paid to people or companies by the

insurance company

Against any kind of hazards or calamities.

There are some major types of insurances that include

4
1. Health insurance

2. Life insurance

3. Casualty insurance

4. Disability insurance

5. Property insurance

6. Liability insurance

7. Credit insurance

5
 OBJECTIVES

The study is undertaken with the following objectives:

• To study the awareness and attitude of users towards SBI LIFE INSURANCE.

• To find out the socio economic variables that influences the insuring public to take up

the policies.

• To find the advertisement effectiveness and more attractive media.

• To find satisfaction level of insuring public about services provided by SBI LIFE

INSURANCE.

• To examine how for the expectations of policy holders are fulfilled by SBI LIFE

INSURANCE.

6
 NEED FOR THE STUDY

• Life like insurance should find 100% awareness and coverage among the population.

It appear that it is not so and this fact needs investigation and remedy.

• Growing individualistic ideas are fast penetrating the Indian minds and the joint-

family and the caste systems are fast cracking. Insurance has many benefits in store

for them. It saves their families from misery, chos, and destination.

• Insurance lays the foundations on which the economic structure of life can be

gradually and safety built up and sustained to the end.

• It is a token of affection we have for the children and our better halves. Insurance

cares for man from the womb to the tomb.

• Out worries dwindles with its aid with the result that we enjoy peace of mind.

Uncertainties to the individual are made certainties for the group.

7
 SCOPE OF THE STUDY

The study includes:

• Awareness and investor’s perception on SBI Life Insurance

• Promotional activities of SBI on Life Insurance

• Socio and Economic variables that influence investors’ investment

8
LIMITATIONS OF THE STUDY

 Though the size of sample 100 is significant, considering that any sample above 100
reflects the characteristic of population. Taking into account the proportion of total

population it may not be worth for generalization.

 The time availability for survey is very little as such it restricting the scope for a
comprehensive study.

 The data collected from respondents was qualitative in nature.

 Non-availability of certain secondary data restricting the scope of study.

9
 RESEARCH METHODOLOGY

DATA SOURCES

The data is obtaining from primary and secondary source.

Primary data

It is collecting through questionnaire and interview methods. S

Secondary data

It is collected from

a. Published documents of SBI Life Insurance corporation

b. Journals

c. Books

d. IRDA Guidelines

e. Websites

RESEARCH APPROACH

The relevant data were collected from the public through survey. The respondents are

approached directly and interviews to generate response to the listed objectives.

SAMPLE UNIT

Sample unit consists of insurance policy holders and potential policy holders in Hyderabad

district.

SIZE OF THE SAMPLE.: 100 respondents.

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The sample size though not very high represent fairly a good cross section of the population

considering that any sample above 100 is good to reflect the characteristic of the population.

SAMPLE DESCRIPTION

For the purpose of generating information the public a sample of 100 respondents are

interviewed from various cross- section of the population. The sample is classified on the

basis of social-economic. Variables.

SAMPLING PROCEDURE

Considering the time availability for the survey and complexities involved in collection of

data, convenience sampling method is adopted. The key area’ in Hyderabad such as

Dilsuknagar Santhosh nagar, Chaitanya puri, LB Nagar,Karman ghat, champapet, Saidabad,

Saroornagar, Nagole, Abids and Koti is selecting and data is collecting from 10 respondents

from each of these localities.

PRETESTING AND FINALISATION OF THE RESERARCH INSTRUMENT

Questionnaire is framing after incorporated suggestion and improvements from various

sources. A pilot test is conducting by interviewing 10 selected respondents on the basis their

response and suggestions from academicians and company guide following changes are

inducted in the questionnaire.

 Certain questions and statements are included and reframed to make it understandable
and specific to generate date relating to the objectives.

 Verbal scales are replaced in the of numerical cum verbal scale to study the insure and

non insured perception towards service rendered by life insurance sector.

11
 Efficiency rating scale is used in order to find out the opinion of insuring public about
the present service rendered by SBI LIFE INSURANCE as a government organization

and efficiency if have been privatized.

RESEACH INSTRUMENT

Questionnaire is using as research instrument. Questionnaire is designed using objective

type questions mostly of multiple choices, keeping in view the time availability at the

disposal of decision maker. Questions designed are simple and specific to generate response

to the objectives. Questionnaire is designed to generate specific response to the objective

from the respondent and is arranged in a logical order, that is logical to the respondents

proper care has been taken to avoid ambiguity in responses and the same time see that the

respondents answer the question easily and quickly considering the time availability their

disposal.

A provision has been made in the questionnaire to make interpretation simpler by including

statement to stratify the respondents on the basis of being aware about the SBI LIFE

INSURANCE and its policies offered by them.

To study the perception of respondents towards life insurances service different verbal scale

adopted. A five point verbal scale disagree, disagreed, neither agree nor disagree, agreed,

strongly agreed is adopted study the respondents attitude and perception. A four point verbal

scale is adopted to find out the respondents level of satisfaction. A five point efficiency scale

is adopted to study the present efficiency of SBI LIFE INSURANCE.

12
METHOD OF ANALYSIS

For analyzing the data collected the following statistical tools are adopting. Percentage

analysis is using to study the awareness level of the respondents and to study perception,

preference and expectation of services if SBI LIFE INSURANCE has been privatized. The

frequency of the table is calculating and number of respondents giving their

acknowledgement to a particular attribute or feature is counted and showed as percentage of

frequency total.

13
 COMPANY OVERVIEW

State Bank of Hyderabad (SBH) is an associate bank of State Bank of India (SBI), and is

one of the scheduled banks in India. The Bank's Head Office is situated at Gunfoundry, Area,

in Hyderabad, India. SBH has over 1100 branches and about 14000 employees. Assets are

in excess of Rs. 767 billion.

The bank has performed well in the past decades, winning several awards for its banking

practices.

The Bank is headed by:

Shri O. P. Bhatt – Chairman

Smt Renu Challu - Managing Director

The bank originated as the central bank of the erstwhile Nizam state under the

name, Hyderabad State Bank. It was established in 1942, during the reign of the last Nizam

of Hyderabad, Mir Osman Ali Khan. The bank also managed the Osmania Sicca, the

currency of Hyderabad state, which had the distinction of having its own currency during

British rule.

In 1956, the bank absorbed, by merger, the Mercantile Bank of Hyderabad, which Raja

Pannalal Pitti had founded in 1935. (Other accounts give year of founding as 1946 and that

of merger as 1952).

Hyderabad State Bank was renamed State Bank of Hyderabad in 1956, and its entire share

capital was vested with the Reserve Bank of India. Later, after the Subsidiary Banks Act was

14
passed in 1959, SBH and the other banks of the princely states became subsidiaries of SBI.

SBH was the first subsidiary of State Bank of India.

State Bank of Hyderabad was constituted as Hyderabad State Bank on 8.8.1941 under

Hyderabad State Bank Act, 1941. The Bank started with the unique distinction of being the

central bank of the erstwhile State of Hyderabad, covering present-day Telangana region of

Andhra Pradesh, Hyderabad-Karnataka of Karnataka and Marathwada of Maharashtra, to

manage its currency - Osmania Sikka and public debt apart from the functions of commercial

banking.

The first branch of the Bank was opened at Gunfoundry, Hyderabad on 5th April 1942.

In 1953, the Bank took over the assets and liabilities of the Hyderabad Mercantile Bank Ltd.

In the same year, the Bank started conducting Government and Treasury business as agent of

Reserve Bank of India. In 1956, the Bank was taken over by Reserve Bank of India as its first

subsidiary and its name was changed from HyderabadStateBank to State Bank of Hyderabad.

The Bank became a subsidiary of the State Bank of India on the 1st October 1959 and is now

the largest Associate Bank of State Bank of India. The Bank in addition to operating in the

core Geographical areas of erstwhile State of the Nizam of Hyderabad comprising of

Telangana region in Andhra Pradesh, Hyderabad – Karnataka and Marathwada region in

Maharashtra has spread its operation to various parts of the country.

15
 SWOT ANALYSIS OF SBI

STRENGTH:

• Brand name of SBI

• Market Leader in banking sector

• Wide Distribution Network

• Diversified Portfolio

• Government owned banking sector

• Low Transition Costs-SBI offers very low transition costs which attracts small

customers

WEAKNESS:

• The existing hierarchical management structure of the bank, although strength in

some respects, is a barrier to change.

• Though SBI cards are the 2nd largest player in the credit card industry, it has the

highest nonperforming assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec

2007).

• Modernisation: SBI lags with respect to private players in terms of modernisation of

its processes, infrastructure, centralisation, etc.

16
OPPORTUNITIES:

• Merger of associate banks with SBI

• Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further

increase its reach.

• Increasing trade and business relations and a large number of expatriate populations

offers a great opportunity to expand on foreign soil

THREATS:

• Employee Strike

• Private banks have started venturing into the rural and semi-urban sector, which used

to be the bastion of the State Bank and otherPSU banks

• Consumer expectations have increased many folds in last few years and the bank has

not been responsive enough to meet them on time.

17
Advent of MNC banks

SBI Life Insurance had to necessarily identify those elements which were most significant to

its growth, prosperity and well-being. A systematic analysis of the past and present trends

and identification of future opportunities and threats in combinations with relevant data.

Provided the basis for making decision to exploit opportunity and avoid threats.

Therefore an attempt is made to study the socio economic variable that influencing the

insuring public, and to study the awareness level and advertisement effectiveness and to

study the present scenario of service provided by LIC and expectation over the privatization

of the sector in suburban areas.

State Bank of Hyderabad was constituted as “Hyderabad State Bank’ on 8-8-1941 under the

Hyderabad State Bank Act, 1941. The Bank started as the Central Bank to the erstwhile

princely State of Hyderabad for managing its currency – Osmania Sikka and public debt,

besides functioning as a commercial bank.

The First Branch of the Bank was opened at Gun foundry, Hyderabad on 5th April, 1942.In

1953, the Bank took over the assets and liabilities of the Hyderabad Mercantile Bank Ltd., In

the same year, the Bank started conducting Government and treasury businesses as the agent

of Reserve Bank of India as its first subsidiary and its name was changed from Hyderabad

State Bank to ‘State Bank of Hyderabad’. The Bank became a subsidiary of State Bank of

India on 1st October, 1959 and is now the largest Association Bank of State Bank of India.

The Bank’s core Geographical area of operations continues to be the erstwhile State of the

Nizam of Hyderabad comprising of Telangana region in Andhra Pradesh, Hyderabad –

Karnataka and Marathwada region in Maharashtra.

18
With over 70% of its branches located in these areas, the Bank has been playing a catalytic

role in the economic development of these regions through financing of Commerce, industry

and agriculture. The Bank has over the years also broad – based its operations in other parts

of the country and now has a network of more than 1200 branches and more than 1000

ATMs spread over the length & breadth of the country. Around 300 branches conduct

government business (state/central) and more than 200 branches maintain currency chests.

Mission of the Bank:

To achieve pre-eminence in banking and financial sectors with commitment to excellence in

customer satisfaction, profit maximization and continued emphasis on development banking

through a skilled and committed work force by providing training facilities and technological

up gradations

CROSS SELLING IN STATE BANK OF HYDERABAD

• Cross-selling is designed to widen the customer's reach to Insurance products through

Banks net work and decrease the likelihood of the customer switching over.

• Providing additional financial products to their Loyal customers.

• Cross selling is one of the smartest methods of improving revenues to the Bank. In

today’s business environment acquiring new customers has become extremely

expensive because of very high customer solicitation activity and very low response

rates to customer acquisition efforts.

• Cross selling is a much easier and smarter method of increasing revenues. The key to

effective cross sell is to understand the needs of your customers, and then tailoring

your product offering to suit their needs. Cross sell enable us to understand customer

19
 needs. Our cross sell models not only assess a customer’s propensity to a product but

also help you identify and suggest right product.

• By cross-selling to our existing customers, the costs can be brought down. We can

also offer competitive pricing and better deals to our customers.

• Cross-selling considerably reduces customer acquisition costs, servicing and

marketing, and communication costs and thereby substantially increases spreads for

banks.

After opening up of the insurance industry to the private players, many private insurance

companies entered into the fray and Bancassurance has also become popular. State Bank of

India, the principal bank of State Bank of Hyderabad, has also started their insurance arm,

SBI Life Insurance Co., Ltd. in the year 2001. Accordingly, State Bank of Hyderabad took

Corporate Agency of SBI Life Insurance Co., in the year 2002 and launched Bancassurance

in the bank. The Bank has an advantage of strong customer base spreading over 1200

branches all over India, to whom the bank can sell the insurance products and get sizeable fee

based income through Bancassurance channel.

The Bank entered into Bancassurance in the year 2002 on a small note, as one of the

activities of the Personal & Services Banking Department. Later, the Bank set up a separate

Insurance Department, to look after the Bancasurance. The Department is now called Cross

Selling Department, as it also is looking after other fee based activities of Mutual Funds and

Credit Cards. The Department is now cross selling the following products:

20
 1. Life Insurance Products of M/s.SBI Life Insurance Co

2. Non-Life Insurance Products of M/squinted India Insurance Co.

3. Mutual Fund products of M/s.SBI Mutual Funds & UTI.

4. Credit Cards of M/s. SBI Cards

The Bank earned fee based income of Rs.21.47 crores as on 31.3.2010 from cross selling

activities. The income from Cross Selling is likely to increase in the coming years.

M/s.SBI Life has two types of insurance products, i.e., Group Products and Individual

Products. Group products are designed for different types of customers of the Bank. They

have introduced creditor based products, like Home Loan Insurance for the Home Loan

borrowers, Car Loan Insurance, Tractor Loan Insurance & Personal Loan for covering the

loan amount of the borrowers. In case of any eventuality, the loan outstanding will be paid

by the insurance company, thereby relieving the legal heirs of the deceased, from these

debts. There is also a scheme to cover all the Savings Bank and other customers, called

‘Group Swadhan ’, under which the risk cover is available upto Rs.5.00 lakh for a nominal

premium payment & with partial / full return of premium . For selling these Group

products, no trained person is required. All Branches of SBH are marketing these products.

In respect of Individual products, specified persons to be trained for 25/50 hours as per IRDA

guidelines and they are called Certified Insurance Facilitators (CIF) for selling SBI Life

Products. The Bank has trained more than 900 officers and clerks as CIFs, for selling the

individual products of SBI Life. The popular individual schemes are Smart ULIP, Unit Plus

III -Child Plan.

21
The Bank has also entered into MOU for selling non-life insurance products with M/s United

India Insurance Co., Ltd. The loan assets financed by the Bank are to a major extent are

covered with UIIC and getting attractive fee based income. The company has two group

products exclusively for the customers of SBH. Sneha Accident Insurance Scheme for all

customers, which provides for risk cover of Rs.1 lack for any accidental death at a premium

of Rs.40 per annum and “Health Insurance Scheme” a floater policy covering a family of

four for a sum assured from Rs. 50,000 to Rs.5,00,000 at nominal premium.

22
 INDUSTRY OVERVIEW

IMPORTANCE OF INSURANCE

A nation is preparing itself for becoming more competitive and to prove itself to the world

that it has the potent to set an example of development to all developing countries. But an

important point to be noticed is whether the country has really the capacity, capability and

maturity to accept the reforms put forth by the ruling government and push its hands towards

the miraculous reach while economist predict these reform process as an Miracle within

reach with long roads ahead. Only time could tell what is likely to come.

With privatization of life insurance having been accepted as part of the front

government common minimum programme and with the setting up of the Life Insurance

regulatory authority, the stages has been set for the private sector entry. While the time frame

within which this will be achieved is uncertain. There is clear indication that there will be no

going back on privatization especially taking into account its role as a main source for

infrastructure development in the times to come.

The concept of insurance has been prevalent in India since ancient times amongst

Hindus. Overseas traders practiced a system of marine insurance. The joint family system,

peculiar t o India, was a method of social insurance of every member of the family on his

life. The law r elating to insurance has gradually developed, undergoing several phases from

nationalization of the insurance industry to the recent reforms permitting entry of private

players and foreign investment in the insurance industry. Insurance in India started without

any regulations in the nineteenth century of British colonial era. After the independence, the

Life Insurance was nationalized in 1956, and then the general insurance business was

nationalized in 1972, with 4 insurance companies operating under the supervision of General

23
Insurance Corporation of India. It was expected that the subsidiary companies would provide

effective competition to each other. For more than two decades, the subsidiary companies

have acquired considerable experience, expertise and financial strength and have also

established reasonable standards of conduct of business.

The Constitution of India is federal in nature in as much there is division of powers

between the Centre and the States. Insurance is included in the Union List, w herein the

subjects included in this list are of the exclusive legislative competence of the Centre.

The Central Legislature is empowered to regulate the insurance industry in India and hence

the law in this regard is uniform throughout the territories of India.

The development and growth of the insurance industry in India has gone through three

distinct stages.

24
FORMATION OF THE INSURANCE INDUSTRY IN INDIA

Insurance law in India had its origins in the United Kingdom with the establishment of a

British firm, the Oriental Life Insurance Company in 1818 in Calcutta, followed by the

Bombay Life Assurance Company in 1823, the Madras Equitable Life Insurance Society in

1829 and the Oriental Life Assurance Company in 1874. However, till the establishment of

the Bombay Mutual Life Assurance Society in 1871, Indians were charged an extra premium

of up to 20% as compared to the British. The first statutory measure in India to regulate the

life insurance business was in 1912 with the passing of the Indian Life Assurance Companies

Act, 1912 (“Act of 1912”) (which was based on the English Act of1909). Other classes of

insurance business were left out of the scope of the Act of 1912, as such kinds of insurance

were still in rudimentary form and legislative controls were not considered necessary.

General insurance on the other hand also has its origins in the United Kingdom. The firs t

general insurance company Triton Insurance Company Ltd. was promoted in 1850 by British

nationals in Calcutta. The first general insurance company established by an Indian was

Indian Mercantile Insurance Company Ltd. in Bombay in 1907. Eventually, with the growth

of fire, accident and marine insurance, the need was felt to bring such kinds of insurance

within t he purview of the Act of 1912.While there were a number of attempts to introduce

such legislation over the years, non-life insurance was finally regulated in 1938 through the

passing of the Insurance Act, 1938 (“Act of 1938”). The Act of 1938 along with various

amendments over the years continues till date t o be the

1. Definitive piece of legislation on insurance and controls both life insurance and

general insurance.

25
2. General insurance, in turn, has been defined to include “fire insurance business” ,

“marine insurance

3. Business” and “miscellaneous insurance business” , whether singly or in combination

with any of them.

4. Nationalization of the Insurance Business in India

Entry of Private Players

On January 19, 1956, the management of life insurance business of two hundred and forty

five Indian and foreign insurers and provident societies then operating in India was taken

over by the Central Government. The Life Insurance Corporation (“LIC”) was formed in

Sept ember 1956 y the Life Insurance Corporation Act, 1956 (“LIC Act”) which granted LIC

the exclusive privilege to conduct life insurance business in India. However, an exception

was made in the case of any company, firm or persons intending to carry on life insurance

business in India in respect of the lives of “persons ordinarily resident outside India”,

provided the approval of the Central Government was obtained.

The exception was however not absolute and a curious prohibition existed. Such company,

firm or person would not be permitted to insure the life of any “person ordinarily resident

outside India”, during any period of their temporary residence in India. However, the LIC

Act, 1956 left outside its purview the Post of fice Life Insurance Fund, any Family Pension

Scheme framed under the Coal Mines Provident Fund, Family Pension and Bonus Schemes

Act, 1948 or the Employees' Provident Insurance in India started without any regulations in

the nineteenth century of British colonial era. After the independence, the Life Insurance was

nationalized in 1956, and then the general insurance business was nationalized in 1972, with

4 insurance companies operating under the supervision of General Insurance Corporation of

26
India. It was expected that the subsidiary companies would provide effective competition to

each other. For more than two decades, the subsidiary companies have acquired considerable

experience, expertise and financial strength and have also established reasonable standards of

conduct of business.

Reforms in the Insurance Sector

In furtherance to the financial reforms, recognizing that insurance is an important part of the

overall financial system, Government of India has appointed a committee on Reforms in the

Insurance Sector in 1993. The committee (known as Malhotra Committee) had recommended

the opening up of insurance sector to competition stating that introduction of competition

will result in better customer service and help improve the variety and make competitive the

price of insurance products. At that time, life and general insurance companies were state

monopolies with very little competition. In its report, the Committee recommended that the

area under tariffs should be progressively reduced with the object of limiting it to only few

classes and expected that this will promote competition and improve underwriting skills.

27
REGULATORY AUTHORITY:

1. Insurance Regulatory and Development Authority

The IRD Act has established the Insurance Regulatory and Development Authority

(“IRDA” or “Authority”) as a statutory regulator to regulate and promote the insurance

industry in India and t o protect the interests of holders of insurance policies. The IRD Act
28
also carried out a series of amendments to the Act of 1938 and conferred the powers of the

Controller of Insurance on t he IRDA. The members of the IRDA are appointed by the

Central Government from amongst persons of ability, integrity and standing who have

knowledge or experience in life insurance, general insurance, actuarial science, finance,

economics, law, accountancy, administration etc. The Authority consists of a chairperson, not

more than five whole-time members and not more than four part-time members. Powers,

Duties and Functions of the Authority The Authority has been entrusted with the duty to

regulate, promote and ensure the orderly growth of the insurance and re-insurance business in

India. In furtherance of this responsibility, it has been conferred with numerous powers and

functions which include prescribing regulations on the investments of funds by insurance

companies, regulating maintenance of the margin of solvency, adjudication of disputes

between insurers and intermediaries, supervising the functioning of the Tariff Advisory

Committee, specifying t he percentage of premium income of the insurer t o finance schemes

for promoting and regulating professional organizations and specifying the percentage of life

insurance business and general insurance business to be undertaken by the insurer in the rural

or social sector.

2. Tariff Advisory Committee

The Tariff Advisory Committee (“Advisory Committee”) is a body corporate, which

controls and regulates the rates, advantages, terms and conditions offered by insurers in the

general insurance business. The Advisory Committee has the authority to require any insurer

to supply such information or statements necessary for discharge of its functions. Any insurer

failing to comply with such provisions shall be deemed to have contravened the provisions of

the Insurance Act. Every insurer is required to make an annual payment of fees to the

29
Advisory Committee of an amount not exceeding in case of reinsurance business in India,

one percent of the total premiums in respect of facultative insurance accepted by him in

India; and in case of any other insurance business, one percent of the total gross premium

written direct by him in India.

3. Insurance Association of India, Councils and Committees

All insurers and provident societies incorporated or domiciled in India are members of

the Insurance Association of India (“Insurance Association”) and all insurers and provident

societies incorporated or domiciled elsewhere than in India are associate members of t he

Insurance Association. There are two councils of the Insurance Association, namely the Life

Insurance Council and the General Insurance Council. The Life Insurance Council, through

its Executive Committee, conducts examinations for individuals wishing to qualify

themselves as insurance agents. It also fixes the limits for actual expenses by which the

insurer carrying on life insurance business or any group of insurers can exceed from the

prescribed limits under the Insurance Act. Likewise, the General Insurance Council, through

its Executive Committee, may fix the limits by which the actual expenses of management

incurred by an insurer carrying on general insurance business may exceed t he limits as

prescribed in the Insurance Act.

4. Ombudsmen

The Ombudsmen are appointed in accordance with the Redressal of Public Grievances

Rules, 1998, to resolve all complaints relating t o settlement of claims on the par t of

insurance companies in a cost-effective, efficient and effective manner. Any person who has

a grievance against an insurer may make a complaint to an Ombudsman within his

jurisdiction, in the manner specified. However, prior to making a complaint, such person

30
should have made a representation to the insurer and either the insurer has rejected the

complaint or has not replied to it. Further, the complaint should be made not later than a year

from the date of r ejection of the complaint by the insurer and should not be any other

proceedings pending in any other court, Consumer Forum or arbitrator pending on the same

subject matter. The Ombudsmen are also empowered to receive and consider any partial or

total repudiation of claims by an insurer, any dispute in regard to the premium paid in terms

of the policy, any dispute on the legal construction of the policies in as much such a dispute

relates to claims, delay in settlement of claims and the non-issue of any insurance document

to customers after receipt of premium.

Registration of Insurance Company

1. General Registration Requirements

The following are some of the import ant general registration requirements that an applicant

would need to fulfill:

(a) The applicant would need to be a company registered under the provisions of the Indian

Companies Act, 1956. Consequently, any person intending to carry on insurance business in

India would need to set up a separate entity in India.

(b) The aggregate equity participation of a foreign company (either by itself or through its

subsidiary companies or its nominees) in the applicant company cannot not exceed twenty

six percent of the paid up capital of the insurance company. However, the Insurance Act and

the regulations there under provide for the manner of computation of such twenty-six per

cent.

31
(c) The applicant can carry on any one of life insurance business, general insurance business

or reinsurance business. Separate companies would be needed if the intent were t o conduct

more than one business.

(d) The name of the applicant needs to contain the words “insurance company” or

“Assurance Company”.

2. Capital Structure Requirements

The applicant would need to meet with the following capital structure requirements:

(a) A minimum paid up equity capital of rupees one billion in case of an applicant which

seeks to carry on the business of life insurance or general insurance.

(b) A minimum paid-up equity capital of rupees two billion, in case of a person carrying on

exclusively the business of reinsurance.

In determining the aforesaid capital requirement, the deposits to be made and any preliminary

expenses incurred in the formation and registration of the company would be included.

A “promoter” of the company is not permitted to hold, at any time, more than twenty-six per

cent of the paid-up capital in any Indian insurance company. However, an interim measure

has been permitted percentages higher than twenty six percent are permitted if the promoters

divest, in a phased manner, over a period of ten years from the date of commencement of

business, the share capital held by them in excess of twenty six per cent.

3. Procedure for obtaining a certificate of registration

An applicant desiring to carry on insurance business in India is required to make a requisition

for a registration application t o the IRDA in a prescribed format along with all the relevant

documents. The applicant is required to make a separate requisition for registration for each

32
class of business i.e. life insurance business consisting of linked business, non-linked

business or both, or general insurance business including health insurance business.

The IRDA may accept the requisition on being satisfied of the bonafides of the applicant, the

completeness of the application and that the applicant will carry on all the functions in

respect of the insurance business including management of investments etc. In the event that

the fore said requirements are not met with, the Authority may after giving the applicant a

reasonable opportunity of being heard, reject the requisition. Thereafter, the applicant may

apply to the Authority within thirty days of such rejection for re-consideration of its decision.

Additionally, an applicant whose requisition for registration has been rejected, may approach

the Authority with a fresh request for registration application after a period of two years from

the date of reject ion, with a new set of promoters and for a class of insurance business

different than the one originally applied for

Regulatory Framework:

The main regulations that regulate the insurance business are the Insurance Act, 1938, the

Life Insurance Corporation Act, 1956, the General Insurance Business (Nationalizations)

Act, 1982, the Marine Insurance Act, 1963 and the Motor Vehicles Act, 1988. The Indian

Contract Act, 1872, governs most of the aspects of the insurance contract. Additionally, the

Foreign Exchange Management Act, 2000, Income Tax Act, 1961, Indian Stamp Act and the

Hindu and Indian Succession Act govern some aspects involved in insurance.

1. Deposits

Every insurer should, in respect of the insurance business carried on by him in India, deposit

with the

33
Reserve Bank of India (“RBI”) for and on behalf of the Central Government of India the

following

• amounts, either in cash or in approved securities estimated at the market value of the

securities on the day of deposit, or partly in cash and par tly in approved securities:· in the

case of life insurance business, a sum equivalent to one per cent of his total gross premium

written in India in any financial year commencing after the 31 day of March, 2000, not

exceeding rupees hundred million;· in the case of general insurance business, a sum

equivalent to three per cent of his total gross st premium written in India , in any financial

year commencing after the 31 day of March, 2000, not exceeding rupees hundred million;

• In the case of re-insurance business, a sum of rupees two hundred million.

• If business done or to be done is marine insurance only and relates exclusively to

country craft or its cargo or both, only rupees one hundred thousand should be deposited with

the RBI.

These deposits will be held by the RBI though for the credit of the insurer and are returnable

to the insurer in the event the provisions of the Insurance Act mandate such returns. Interest

accruing, due and collected on deposited securities will be paid to t he insurer, subject to any

deductions of the normal commission chargeable for the realization of interest. In addition, it

is import ant to note that the deposits will:

• Not be susceptible to any assignment or charge; or

• Not be available for the discharge of any liability of the insurer other than liabilities

arising out of policies of insurance issued by the insurer so long as any such liabilities remain

undercharged, or

34
• Not be liable to attachment in execution of any decree except a decree obtained by a

policy-holder of the insurer in respect of a debt due upon a policy which debt the policy-

holder has failed to realize in any other way.

Where the insurer has ceased to carry on all classes of insurance business in India, the

deposit made with the RBI shall, on an application being made to the Court, be returned to

the insurer after satisfaction of all his liabilities in India in respect of all classes of insurance

business.

2. Investments

Every insurer is required to invest and keep invested certain amount of assets as determined

under the Insurance Act. The funds of the policyholders cannot be invested (directly or

indirectly) outside India.

Benefits of Insurance:

Insurance is mainly a instrument used by consumers for hedging the future contingent risks

related with life, health and non-life general issues. Business people will be more inclined to

risk their money by building factories, making goods, sailing ships, flying planes, with the

knowledge that they will not lose everything should they fall victim of some risk. Insurance

provides affordability and accessibility. It relieves those people insuring from the worry and

anxiety they may have about how they would meet the cost of risk. Insurance also can help in

actually reducing losses. Life insurances provide protection and secure life to your family

after any miss happening. Health insurances cover the cost of private medical treatments.

Vehicle insurances provide protection against losses incurred as a result of traffic accidents

and liability.

35
36
37
 LITERATURE REVIEW
REVIEW OF RELATED CONCETS

INDUSTRIAL SCENARIO

In India the insurance industry is the last Major financial service sector remaining to be

thrown to completion, either from the domestic private sector of from the foreign sector. A

lot of public interest has been generated by way of ever since the government made its

intention clear about possible opening up of Insurance sector for competitions from private

companies. The views expressed are both to and against the issue. The plan used by those

possible misuse funds and lack of serious steps to serve the needs of the rural, on the other

those who want private companies to operate, base their argument on the likely improvement

in service in service through competition and influx of new policies.

OPPORTUNITIES IN THE FIELD

If one were to analyze the performance of nationalized insurance companies it would give

us a clear picture of how they have considerably expanded their business and established a

38
extensive presence throughout the country. They have developed financial strength and large

reservoirs of trained man power. However, the lack of competition has engendered

complacency in the insurance industry which is reflected, among other things of market

network, excessive lapsation of policies over staffing and serious loss in technology. Despite

overall growth of insurance several lines of business have not been sufficient developed and

there is vast untapped potential.

The Indian Insurance Market has a large potential considering the country’s high and

burgeoning population, a growing and increasingly affluent middle class gross domestic

saving ofg around 23% of GDP, its GDP growth rate which averaged 5.6% over the 1980’s

and is expected to rise to 6.7% in second half of 1990’s industrial output that could grow by

8% to 10% p.a. and rising trade volumes shows the increasing business opportunities to

insurer The percentage of population insured in India is much less compared to countries

like U.K. and U.S. and with rural population forming the backbone of Indian Economy their

constitution as percentage of total population insured in very feeble. Our per capita insurance

of Rs.22 compares very unfavorable possibilities of other countries. All these statistics

reveals the vast growth possibilities in this field. In competitive environment both the public

and private sector would vie for a share in the growing market.

LIFE INSURANCE CORPORATION

LIC has achieved an enviable growth in the last one decade both in terms of new business

performance as well as in the area of organizational development, while on the one had it

provided with the sense of achievement and opportunities on the other hand it also posed

formidable challenges. The challenges implied formulation and implementation of certain

specific strategy and action plans for sustaining and even accelerating this high growth rate

39
while simultaneously preparing the organization infrastructure through appropriate

technological procedural and system development initiatives as also setting in motion the

process like human resources development, which would bring about desired cultural

changes.

OBJECTIVES OF THE SBI LIFE INSURANCE OF INDIA

The following are the some of the objectives of Life Insurance Corporation.

1. Spread life insurance much more widely and in particular to the rural areas and to the

socially economically backward classes with a view to reaching all insurable persons

in the country and providing them adequate financial cover against death at a

reasonable cost.

2. Maximize mobilization of people’s savings by making insurance linked savings

adequately attractive.

3. Bearer in mind, the investment of funds the primary obligation policy hold whose

money it holds in trust, without loss sight of the interest of the community as a

whole the funds to be deployed to the best advantage of the investors as well as the

community as a whole, keeping in view national; priorities and obligations of

attractive return.

40
4. Conduct business with utmost economy and with the full realization that the moneys

belonging to the policy holders.

5. Act as trustees of the insured public in their individual and collective capabilities.

6. Meet the various life insurances needs of the community that would arise in the

changing social and economic environment.

7. Involve all people working in the corporation to the best of their capability in

furthering the interests of the insured public by providing efficient service with

courtesy.

8. Promote amongst all agents employees of the corporation a sense of participation,

pride and job satisfaction through discharge their duties with dedication towards

achievement of corporation objectives.

DATA ANALYSIS AND INTERPRETATION

Do you have policies in any insurance company

Valid Cumulative
Frequency Percent Percent Percent
YES 86 86.0 86.0 86.0
NO 14 14.0 14.0 100.0
Total 100 100.0 100.0

Table 1: policies in any insurance company

41
 Figure 1: percentage of policies in any insurance company

Interpretation:

Majority about 86% of the respondents are having policies in different insurance companies.

Do you heard about SBI life insurance

Valid Cumulative
Frequency Percent Percent Percent
100 100.0 100.0 100.0
YES
0 0.0 0.0 0.0
NO

Table 2: SBI Policy awareness

42
 Figure 2: percentage of SBI policy awareness

Interpretation:

As per the survey, all respondents are heard about SBI life insurance as per the sample

size(100)

How did you come to know about SBI life insurance

Valid Cumulative
Frequency Percent Percent Percent
RELATIVES FRIENDS 34 34.0 34.0 34.0
ADVERTISEMENTS 30 30.0 30.0 64.0
FROM BANK 34 34.0 34.0 98.0
OTHERS 2 2.0 2.0 100.0
Total 100 100.0 100.0

43
 Table 3: awareness from whom

Figure 3: percentage of awareness from whom

Interpretation:

34% of respondents saying that they came to know about SBI life insurance from relatives/

friends and from bank

According to you SBI service as compared to othet life insurance are

Valid Cumulative
Frequency Percent Percent Percent
Valid EXCELLENT 58 58.0 58.0 58.0
GOOD 34 34.0 34.0 92.0
AVERAGE 8 8.0 8.0 100.0
Total 100 100.0 100.0

Table 4: services compared to other life insurance

44
 Figure 4: percentage in services compared to other life insurance

Interpretation:

Majority of the respondents about 58% are saying that they are satisfied with the services of

SBI life insurance. 8% of them are saying that services are average

Have you satisfied with the service of SBI life insurance

Valid Cumulative
Frequency Percent Percent Percent
Valid VERY
34 34.0 34.0 34.0
SATISFIED
SATISFIED 50 50.0 50.0 84.0
NEUTRAL 16 16.0 16.0 100.0
Total 100 100.0 100.0

45
 Table 5: satisfaction levels with services

Figure 5: percentage of satisfaction levels with services

Interpretation:

50% of respondents are satisfied with the SBI services. 16% respondents are not able to say

anything

Rate the SBI life insurance

Valid Cumulative
Frequency Percent Percent Percent
Valid AVERAGE 8 8.0 8.0 8.0
GOOD 24 24.0 24.0 32.0
VERY GOOD 36 36.0 36.0 68.0
EXELLENT 32 32.0 32.0 100.0
Total 100 100.0 100.0

46
 Table 6: rating of SBI life insurance

Figure 6: percentage rating of SBI life insurance

Interpretation:

36% of respondents are saying that SBI life insurance is very good. 0% are saying that it is

worse

Timeliness of your receipts of account statement of insurance

Valid Cumulative
Frequency Percent Percent Percent
Valid EXELLENT 46 46.0 46.0 46.0
GOOD 48 48.0 48.0 94.0
AVERAGE 6 6.0 6.0 100.0
Total 100 100.0 100.0

Table 7: timeliness in receipts of accounts

47
 Figure 7: percentage in timeliness in receipts of accounts

Interpretation:

Majority of respondents about 48% are saying that service in timeliness of account

statements are good

Information available on your insurance

Valid Cumulative
Frequency Percent Percent Percent
Valid EXELLENT 38 38.0 38.0 38.0
GOOD 50 50.0 50.0 88.0
AVERAGE 8 8.0 8.0 96.0
POOR 4 4.0 4.0 100.0
Total 100 100.0 100.0

48
 Table 8: availability of information

Figure 8: percentage in availability of information

Interpretation:

Majority of respondents about 50% are giving good response towards the availability of

information

For your future policies, will you choose SBI life insurance

Valid Cumulative
Frequency Percent Percent Percent
Valid YES 68 68.0 68.0 68.0
NO 6 6.0 6.0 74.0
CAN'T SAY 26 26.0 26.0 100.0
Total 100 100.0 100.0

Table 9: choosing SBI for future policies

49
 Figure 9: percentage on choosing SBI for future policies

Interpretation:

Majority of respondents about 68% are saying ‘yes’ for SBI life Insurance for future purpose

Could you get information sought in SBI

Valid Cumulative
Frequency Percent Percent Percent
Valid YES 86 86.0 86.0 86.0
NO 14 14.0 14.0 100.0
Total 100 100.0 100.0

Table 10: activeness in information availability

50
 Figure 10: percentage in activeness in information availability

Interpretation:

Of respondents about 86% are satisfied with availability of information sought.

How knowledge was the person in SBI

Valid Cumulative
Frequency Percent Percent Percent
Valid EXELLENT 36 36.0 36.0 36.0
GOOD 56 56.0 56.0 92.0
SATISFIED 4 4.0 4.0 96.0
DISSATISFIED 4 4.0 4.0 100.0
Total 100 100.0 100.0

Table 11:information about SBI staff

51
 Figure 11: percentage in information about SBI staff

Interpretation:

Majority of respondents about 56% are saying that SBI saff are good in their knowledge

about SBI life Insurance

Rate the following insurance companies

BELOW
INFLUENTIAL GOOD BETTER AVERAGE LEAST
ICICI Lombard Life Insurance 28% 26% 22% 4% 20%
Reliance Life Insurance 6% 34% 30% 26% 4%
SBI Life Insurance 66% 18% 10% 6% 0%
Max network Life Insurance 0% 20% 18% 32% 30%
Bajaj alliance Life Insurance 0% 2% 20% 32% 46%

Table 12: rating on different life insurance companies

52
 Figure 12: percentage of rating on different life insurance companies

Interpretation:

Around 66% of people are saying that SBI life insurance is influential compared to other life

insurance companies

AGE

Valid Cumulative
Frequency Percent Percent Percent
Valid 20-30 22 22.0 22.0 22.0
30-40 42 42.0 42.0 64.0
40-50 28 28.0 28.0 92.0
40-50 8 8.0 8.0 100.0
Total 100 100.0 100.0

Table 13: Age group

53
 Figure 13: percentage in age group

Interpretation:

Majority of respondents are in between the age group 30-40 years

Gender

Valid Cumulative
Frequency Percent Percent Percent
Valid MALE 84 84.0 84.0 84.0
FEMALE 16 16.0 16.0 100.0
Total 100 100.0 100.0

Table 14: Gender

54
 Figure 14: percentage in Gender

Interpretation:
84% of respondents are males and 16% are females

Occupation

Valid Cumulative
Frequency Percent Percent Percent
Valid BUSINESS MAN 50 50.0 50.0 50.0
EMPLOYEE 40 40.0 40.0 90.0
OTHERS 10 10.0 10.0 100.0
Total 100 100.0 100.0

Table 15: occupation details

55
 Figure 15: occupation details in percentage

Interpretation:

Majority of the respondents about 50% are business man

Income per annum

Valid Cumulative
Frequency Percent Percent Percent
Valid BELOW 100000 8 8.0 8.0 8.0
100000-300000 44 44.0 44.0 52.0
300000-500000 28 28.0 28.0 80.0
ABOVE 500000 20 20.0 20.0 100.0
Total 100 100.0 100.0

56
 Table 16: income/annum details

Figure 16: income/annum details in percentage

Interpretation:

Majority of respondents about 44% are in between the income around 1,00,000 to 3,00,000

per annum

FINDINGS

• Most of the respondent is in between the age group of 30-40. Least no of the

respondents are between the age group of 40-50

• Most of the respondents are Males covering about 82%. Remaining are females

57
• The date shows that 44% are under the income levels of 10000 to30000 per annum

and only 8% respondents are under the income level below 10000

• Most of the respondents are business man and least no of respondents are others of

various occupations.

• The data shows that 86% are covering under various insurance plans of various

Insurance Companies.

• The data shows that 100% of respondents are aware about SBI Life Insurance

• The data shows that each 34% of respondents are come to know about Sbi life

insurance and through Bank. 2% of respondents are cone to know from others

• Most of the respondents of about 56% are saying that SBI services are excellent. 8%

respondents are saying that it’s services are average.

• That data shows that 50% of respondents are satisfied with SBI services. 16% are

neutral.

• The data shows that 36% are saying that SBI life insurance is good and 8% of

respondents are saying it is average.

• The data saying that about 48% of respondents are voting good for the receipts of

account statements time to time and 6% are voting for average.

• Information available about insurance is good said by 50% of respondents and 4% are

saying poor.

• 68% of respondents are saying that they will choose SBI Life Insurance in future and

6% are saying that they are saying no.

58
• Most of the respondents about 56% are saying that Insurance person is

knowledgeable.

• The data shows that 66% of respondents are rate influential for SBI Life Insurance

and 4% of respondents are rate influential.

RECOMMENDATIONS

• It is observed that many of the people are in between the income group between

10000-30000. So, it is important to focus on this income level group.

59
• The company should mainly focus on business people as they are more in number

observed n this survey

• Increase in the advertisement will increase the consumers

• Satisfaction levels are high regarding to their services. It is very important to continue

this for future purpose.

• Information about insurance is good. But there is need of effective information in

order to increase satisfaction levels from good to excellent.

• Effectiveness in services and information for maintaining the loyal customers.

• Knowledgeable persons should be appointed for receiving the customers in the office.

CONCLUSION

60
The study has been conducted to analyze on customer awareness and attitudes about SBI Life

Insurance in Urban areas. The study focus upon the different types of plans Motor and None

motor i.e. health plans.

The top priority of SBI Life Insurance is to provide better insurance services as well as

product plans which must suit the requirement of individual.

The methodology conducted by enhancing the polices taken by individuals is to appoint

insurance agent, who has a great contacts within the society and advise them based on their

need and the risk appetite

Insurance industry grows on contacts which is the foundation of every insurance company to

spread across the length and breadth of country. The industry has attracted a lot of people in

the industry due to its monetary value it carries. This study on customer awareness on SBI

life insurance helps in analyzing the thinking of the people towards SBI life insurance

comparing with other insurance. As insurance industry is vast growing industry in India now-

a-days it is necessary in studying the customer awareness and attitudes on life insurance and

it is very necessary in taking further steps.

ANNEXURE

61
 A QUESTIONNAIRE ON AWARENESS AND ATTITUDES OF
INSURANCE POLICIES WITH REFERENCE TO SBI LIFE
INSURANCE IN HYDERABAD

1. Do you have policies in any insurance company?

a. Yes b. No

2. Have you heard about SBI Life Insurance?

a. Yes b. No

3. How did you come to know about SBI Life Insurance?

a. Relat b. Advertisement
ives/friends

c. From d. Others
Bank

4. According to you SBI service as compared to other Life

Insurance are

a. Excel b. Good
lent

c. Average d. Worse

5. Have you satisfied with the service of SBI Life

Insurance?

a. Very satisfied

b. Satisfied

c. Neutral

d. Dissatisfied

e. Very Dissatisfied

62
6. Rate the SBI Life Insurance on 5 scale

1 2 3 4 5

Rating:
1. Worse
2. Average
3. Good
4. Very Good
5. Excellent

7. Your assessment about SBI service in the following

areas

A) Timeliness of your receipts of account statement of

insurance.

a. Excellent

b. Good

c. Average

d. Poor

B) Information available on your insurance

a. Excellent

b. Good

c. Average

d. Poor

8. For your future policies, will you choose SBI life

insurance?

a. Yes

63
b. No

c. Can’t say

9. Your experience of visiting branch office

A) Could you get information sought?

a. Yes

b. No

c. Some what

B) How knowledge was the person

a. Excellent

b. Good

c. Satisfaction

d. Dissatisfied

10. Rate the following life insurance are 5 scale

a. ICICI Lombard life insurance

b. Reliance life insurance

c. SBI life insurance

d. Max network life insurance

e. Bajaj alliance life insurance

64
 Personal Details:

Name:
Age:
20-30

30-40

40-50

50 and above

Gender:
Male

Female

Occupation:
Business man

Employee

Others (specify……………….)

Income/annum:
Below 1,00,000

1,00,000-3,00,000

3,00,000-5,00,000

Above 5,00,000

65
Thank you for your support
and help in filling up the
above details to fulfill my
project work

BIBILOGRAPHY

• http://www.google.com/

• http://www.moneycontrol.com/

• http://www.sbilifecare.co.in/

• http://www.rbi.org/

• http://sebi.co.in/

66