A Summer Training Report On

A SUMMER TRAINING REPORT ON “STUDY OF LIFE INSURANCE POLICIES AND INVESTMENT STRATEGIES IN AVIVA LIFE INSURANCE COMPANY INDIA LIMITED” AT

SUBMITTED IN THE PARTIAL FULLFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSSINESS ADMINISTRATION U.P.Technical University 2008-10 SUBMITTED BY KULDEEP BHATI MBA (2008-2010) (Enrollment No- 0809470050)

GALGOTIAS INSTITUTE OF MANAGEMENT AND TECHNOLOGY, GREATER NOIDA

COMPANY CERTIFICATE (LETTER HEAD of the Company)

1

TO WHOM IT MAY CONCERN

This is to certify that KULDEEP BHATI, a student of Galgotias Institute of Management and technology, G.Noida , undertook a project on “STUDY OF LIFE INSURANCE POLICIES AND INVESTMENT PORTFOLIO IN AVIVA LIFE INSURANCE COMPANY INDIA LIMITED” at AVIVA Life Insurance Ltd. Ghaziabad from 18th May, 2009 to 18th July, 2009. KULDEEP BHATI has successfully completed the project under the guidance of Mr. Deep Bansal (Branch Training Manager). He is a sincere and hard-working student with pleasant manners. We wish him all success in his future endeavours.

Signature (Deep Bansal) (Branch Training Manager) (AVIVA Life Insurance India Ltd., Ghaziabad)

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CERTIFICATE Of ORIGIN

This is to certify that Kuldeep Bhati , a student of Post Graduate Degree in MBA (International Business), Galgotias Institute of Management and Technology,G.Noida has worked in AVIVA Life Insurance India Ltd., under the able guidance and supervision of Deep Bansal, designation Branch Training Manager, Company AVIVA Life Insurance India Ltd. (Ghaziabad). The period for which he was on training was for 8 weeks, starting from 18th May, 2009 to18th July, 2009. This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in International Business. To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.

Signature (Faculty Guide)

Signature (Student)

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ACKNOWLEDGEMENT I would like to thank AVIVA Life Insurance India Ltd. (Ghaziabad) & Deep Bansal,Branch Training Manager for providing me with this unique opportunity to explore my academic interests in the field of Marketing & Sales.

It has been a highly enriching experience to do my Internship at AVIVA Life Insurance India Ltd., during the summers of 2009. It has been possible to achieve the perfect blend of the valuable experience gained from the work place and the indispensable knowledge gathered from there. My initial days at AVIVA Life Insurance India Ltd., has given me a new experience in life. The corporate culture was all new to me.

I wish to thank my Industry Guide Naveen Aggarwal, Sales Manager AVIVA Life Insurance India Ltd. (Ghaziabad) for giving me this chance to work on this project and extending all support to me during my internship. With his persistent guidance, motivation and encouragement in all my ventures I could successfully complete my project.

I would like to express my sincere gratitude towards my faculty guide for guiding me throughout the project and providing me constant moral support & invaluable feedback.

I would also like to thank entire team of AVIVA Life Insurance India Ltd. (Ghaziabad) who have been a pillar of support for me. Signature (Student) 4

OBJECTIVE I had made some extensive objectives for my study which are as listed below.

1. To determine the current status of the Aviva Life Insurance Company. 2. To find out the customers response towards Aviva Life Insurance Company. 3. To study the satisfaction level of customers in different attributes of Aviva Life Insurance Company.

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TABLE OF CONTENTS

Chapters

Page No.

1.

COMPANY PROFILE

7

2.

OVERVIEW OF INSURANCE HISTORY

24

3.

RESEARCH METHODOLOGY

55

4.

DATA ANALYSIS

62

5.

FINDINGS

79

6.

RECOMMENDATIONS AND SUGGESTION

83

7.

LIMITATION

86

8.

CONCLUSION

88

9.

GLAOSSARY

90

10.

BIBLIOGRAPHY

96

11.

ANNEXURE

98

6

COMPANY PROFILE Aviva is UK’s largest and the world’s fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 35 million-customer base worldwide.

It

has

more

than

£332

billion

of

assets

under

management.

In India, Aviva has a long history dating back to 1834. At the time of nationalisation it was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva was also the first foreign insurance company in India to set up its representative office in

1995.

In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional

healthcare

products.

In accordance with the government regulations Aviva holds a 26 per cent stake in the joint venture

and

the

Dabur

group

holds

the

balance

74

per

cent

share.

With a strong sales force of over 12,000 Financial Planning Advisers (FPAs), Aviva has initiated an innovative and differentiated sales approach to the business. Through the “Financial Health Check” (FHC) Aviva’s sales force has been able to establish its credibility in the market. The FHC is a free service administered by the FPAs for a need-based analysis of the customer’s long-term savings and insurance needs. Depending on the life stage and

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earnings of the customer, the FHC assesses and recommends the right insurance product for them. Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 15 Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir, Bihar, West Bengal and Maharashtra and one regional Bank in Sikkim. When Aviva entered the market, most companies were offering traditional life products. Aviva started by offering the more modern Unit Linked and Unitised With Profit products to the customers, creating a unique differentiation. Aviva’s products have been designed in a manner to provide customers flexibility, transparency and value for money. It has been among the first companies to introduce the more modern Unit Linked

Products in the market. Its products include: whole life (Life Long), endowment (Life Saver, Easy Life Plus), and child policy

(Young Achiever) single premium (Life Bond and Life Bond Plus), Pension (Pension Plus), Term (Life Shield), fixed term protection plan (Freedom Life Plan) and a tax efficient investment plan with limited premium payment term (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to chose cover levels, indexation and partial withdrawals. Aviva’s Fund management operation is one of its key differentiators. Operating from Mumbai, Aviva has an experienced team of fund managers and the range of fund options includes

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Unitised With-Profits Fund and four Unit Linked funds: - Protector Fund, Secure Fund, Balanced Fund and Growth Fund. Aviva has 112 Branches in India (including rural branches) supporting its distribution network. Through its Bancassurance partner locations, Aviva products are available in 378 towns

and

cities

across

India.

Aviva is also keen to reach out to the underprivileged that have not had access to insurance so far. Through its association with Basix (a micro financial institution) and other NGOs, it has been able to reach the weaker sections of the society and provide life insurance to them.

For three consecutive years in 2005, 2006 and 2007, Aviva has had relatively high scores on the parameters of Credibility, Respect, Fairness, Pride and Camaraderie in the survey administered by Grow Talent Company Ltd. along with Great Places to Work® Institute, Inc. and Business World magazine.

9

10

WHO IS AVIVA DABUR A professionally managed company, it is the country's leading producer of Founded in 1884, Dabur is one of India's oldest and largest group of companies with consolidated annual turnover in excess of Rs 1,899 crores. Traditional healthcare products.

AVIVA Aviva is UK’s largest and the world’s fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 35 million-customer base worldwide. It has more than £332 billion of assets under management.

VISION Aviva - where exceeding expectations through innovative solutions is "the" way of life This is the compelling vision that Aviva India has created through the active contribution of its employees. These lines not only define the way we live and work but also serve as a reminder to deliver the best to our customers, shareholders, colleagues, partners & employees at all times. Embedded in this vision are the core values of Integrity, Customer centricity, Passion for winning, Innovation and Empowered team that we have collectively defined and committed to working towards.

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PARTNERS

Aviva is committed to helping our customers get 'Kal par Control' and make the most out of their lives. It is the constant endeavour to ensure that our customers have easy access to Aviva products

and

services

at

all

times.

Aviva has pioneered bancassurance in the country through its tie-ups with 22 leading private and nationalised Banks in the country. Aviva also focuses on bancassurance worldwide and has a proven track record of successful bancassurance relationships. It has 40 major partnerships with leading banks across the globe. Aviva is a leading bancassurer in countries such as France, Italy, Spain, Australia and New Zealand.

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ABN AMRO Bank ABN AMRO is a prominent international bank with European roots and a clear focus on consumer and commercial banking gaining a competitive edge on the chosen markets and client segments. ABN AMRO Bank (India) ventured into the Indian market in 1920 primarily to finance the diamond trading business and evolved by mid 1990’s into a fastest growing retail

bank

and

a

well-respected

wholesale

bank.

The Bank is recognized as one of the most successful consumer banking outfits in the county, known for its innovation and aggression. ABN India consumer banking pioneered the distribution of third party financial products like mutual funds, bonds and life insurance.

Aviva's relationship with ABN India commenced in June 2002 under which the bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 21 branches at 14 locations.

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American Express Bank American Express Company is a diversified worldwide travel and financial services company founded in 1850. It is the world’s largest single card issuer, based on purchase volume generated of nearly 55 million cards worldwide. Present in India since 1921, American Express provides high quality travel related and financial services in India.

Aviva Life Insurance entered into a strategic alliance with American Express for distribution of Life Insurance in June 2002 to offer top-of the line saving-cum-protection plans to Amex bank

and

card

customers.

Aviva offers tailor-made investment solutions to the high net worth clients of the Wealth Management channel. The retail card segment is being tapped through outbound calling to the Amex cardholders. The American Express Inbound call center also pitches Aviva products to its callers.

The Lakshmi Vilas Bank Ltd The Lakshmi Vilas Bank Ltd, based out of Karur, is among the top private banks in India. It has 221 branches with a customer base of 1.2 million, across 10 states. Currently Aviva products are sold across 204 branches of LVB.

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Canara Bank Canara Bank is one of the largest retail banks in India with 2,513 branches spread across 25 States and 4 Union Territories. The customer base of Canara Bank exceeds 27 million. With a net profit of INR 1110 Crores, deposits of over INR 96,908 Crores, 47389 employees for the year ending Mar 2005, Canara Bank is truly a Bank to be reckoned with for the sheer magnitude of coverage it offers its clients. Canara Bank has tied up with Aviva as a Corporate Agent for its Life Insurance Products. Aviva products are currently offered in 1030 Canara Bank branches in 103 Cities.

Punjab & Sind Bank Punjab & Sind Bank was established in the year 1908. Based on the principles of social commitment to the people, help the farmers, and the weaker sections of the society to raise their standard of living and play a significant role in the development of the country. Even after 96 years of its inception, Punjab & Sind Bank stands committed to honor the high ideals of its founding fathers. Punjab and Sindh Bank has a network of 759 branches and 132 extension counters all over the country with close to 9,765 employees. 42 per cent of its branches

are

in

the

rural

and

semi

urban

areas.

In line with spirit of liberalisation the Bank has laid special emphasis on International banking, Hire purchase, Leasing, Tele-banking and Credit card facilities. The bank has also started their Rural Development Division, High

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Tech Agricultural Branches, Specialised Locker Branches, Industrial Finance and SSI branches, besides Housing Finance Branch for the convenience of its customers.

Centurion Bank of Punjab Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail and corporate banking products and services. It holds leadership positions in retail twowheeler loans and commercial vehicle loans. It has been among the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service.

RBI has approved the merger between Centurion Bank and Bank of Punjab effective from October 1st, 2005. The merged entity, named Centurion Bank of Punjab, has a strong nationwide franchise of 241 branches and extension counters and 389 ATMs. With strengths in the retail, SME and agriculture businesses the bank is well poised to capture the opportunities that exist in the Indian market. The combined bank’s 3,500 employees will continue to provide support and an enhanced banking experience to our customers, as part of a bigger, stronger bank. “Aviva’s key strength is its fund management capabilities with an experience of 30 years in money management.”

EQUITY The much-awaited correction finally materialised in the quarter ended June 2006. The BSE Sensex, which peaked at 12612 levels on 10th May 2006, has corrected to around 10000 levels. After three years of sustained Bull Run, the recent correction has been a timely reminder that the markets, in the short term, may see downsides too. Compared to the rise in

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the market, the downtrend has not been very large though it has been quicker than expectations. Even post this 20% or so correction from its peak, the Sensex is up 12.9% year to date. This much-needed correction has weeded out some of the euphoria and the focus on value is back. Does this correction reflect any change in the key fundamentals of India? We do not think so. The three-year rally was in the first place due to appreciation of India’s sustainable growth story. The second reason was an improvement in the global liquidity as investor’s appetite for risk iJhansieased. The India growth story remains intact and the GDP growth in the last few quarters is an evidence of this. We expect GDP to grow by over 7% on a sustainable basis and hence India would continue to be an attractive investment destination. The major reason for the correction has been liquidity moving out of the markets. This has been caused by fall in the commodity prices from their peak, rising global interest rates and high crude prices causing worries about inflation and a global meltdown. With the tightening of global liquidity and reduced risk appetite of investors, there have been outflows from emerging markets including India. Secondly, valuations in India were among the highest in emerging markets and hence witnessed a greater compression. One of the major fears globally is that of a slowing economy in the US and China. India is highly resilient to global meltdowns as private consumption accounts for 62% of our GDP and exports account for only 12% of GDP. With a favourable demographic profile- iJhansieasing working population and improved disposable income in the hands of the consumer, this resilience will only improve. This coupled with superior growth and demographics will drive flows back to India in the long term. In the short term, the markets could continue to witness volatility as the direction would be determined by global liquidity, progress of monsoons and the quarterly results for June 2006. We believe, for the long-term investor, this correction would provide a good opportunity to participate in the India growth story. However, expectations of returns from equity should be moderate with stock returns tracking earnings growth.

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FIXED INCOME Is virtuous cycle turning vicious? Inflation has touched one year high of 5.44%, and INR has touched 2 year low of 46.04. Aligning with these movements, yield on benchmark 10 year Government Bond also went up to a four year high of 8.10%. The latest balance of payments numbers for 2005-06 show an overall balance of $15 bn, helped by a less-than-expected deficit on the current account ($10.6 bn). This was essentially due to strong invisibles (private remittance and net software exports) providing cover for a trade deficit, which was itself moderated by a strong 28% y-o-y growth in exports. Net inflows on the capital account stood at $24.7 bn with $5.7 bn coming from net FDI and $12.5 bn being accounted for by portfolio inflows. Though headline inflation recently has picked up with prices of food and non food articles in the ‘primary goods’ category rising, the government has taken short-term measures in the form of liberalizing imports of wheat and sugar and banning exports of pulses in order to ease the supply situation. Core inflation, that is, excluding the more volatile primary and fuel categories, has picked up a bit in comparison to last year. However it is expected to remain in a manageable range. RBI seems committed to containing inflation and would thus act accordingly. Recently, RBI chose to iJhansiease rates to manage inflationary expectations and in response to various central banks hiking rates globally. This has led to a few banks raising lending rates in addition to getting reflected in the money and bond markets. GDP growth for 2005-06 came in at a better than expected 8.4%, propped up by improved agriculture performance. For 2006-07 also, despite inflationary pressures, the GDP is expected to grow at over 7%. Going forward, monetary tightness will weigh on the interest rate outlook and it is expected to remain firm.

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OVERVIEW OF INSURANCE HISTORY Origin of Insurance Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk of the caravan trade by giving loans that had to be later repaid with interest when the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the practice that, perhaps, was how insurance made its beginning. Life insurance had its origins in ancient Rome, where citizens formed burial clubs that would meet the funeral expenses of its members as well as help survivors by making some payments. As European civilization progressed, its social institutions and welfare practices also got more and more refined. With the discovery of new lands, sea routes and the consequent growth in trade, Medieval guilds took it upon themselves to protect their member traders from loss on account of fire, shipwrecks and the like. Since most of the trade took place by sea, there was also the fear of pirates. So these guilds even offered ransom for members held captive by pirates. Burial expenses and support in times of sickness and poverty were other services offered. Essentially, all these revolved around the concept of insurance or risk coverage. That's how old these concepts are, really. In 1347, in Genoa, European maritime nations entered into the earliest known insurance contract and decided to accept marine insurance as a practice. The

first

step...

Insurance as we know it today owes its existence to 17th century England. In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee House in London, 19

where merchants, ship-owners and underwriters met to discuss and transact business. By the end of the 18th century, Lloyd's had brewed enough business to become one of the first modern insurance companies. Insurance

and

Myth...

Back to the 17th century. In 1693, astronomer Edmond Halley constructed the first mortality table to provide a link between the life insurance premium and the average life spans based on statistical laws of mortality and compound interest. In 1756, Joseph Dodson reworked the table, linking premium rate to age. Enter companies... The first stock companies to get into the business of insurance were chartered in England in 1720. The year 1735 saw the birth of the first insurance company in the American colonies in Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in America for the benefit of ministers and their dependents. However, it was after 1840 that life insurance really took off in a big way. The trigger: reducing opposition from religious groups. The

growing

years...

The 19th century saw huge developments in the field of insurance, with newer products being devised to meet the growing needs of urbanization and industrialization. In 1835, the infamous New York fire drew people's attention to the need to provide for sudden and large losses. Two years later, Massachusetts became the first state to require companies by law to maintain such reserves. The great Chicago fire of 1871 further emphasized how fires can cause huge losses in densely populated modern cities. The practice of reinsurance, wherein the risks are spread among several companies, was devised specifically for such situations.

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There were more offshoots of the process of industrialization. In 1897, the British government passed the Workmen's Compensation Act, which made it mandatory for a company to insure its employees against industrial accidents.With the advent of the automobile, public liability insurance, which first made its appearance in the 1880s, gained importance and acceptance. In the 19th century, many societies were founded to insure the life and health of their members, while fraternal orders provided low-cost, members-only insurance. Even today, such fraternal orders continue to provide insurance coverage to members as do most labour organizations. Many employers sponsor group insurance policies for their employees, providing not just life insurance, but sickness and accident benefits and old-age pensions. Employees contribute a certain percentage of the premium for these policies.

In

India

Insurance in India can be traced back to the Vedas. For instance, yogakshema, the name of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that a form of "community insurance" was prevalent around 1000 BC and practised by the Aryans.Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help families build houses, protect widows and children. Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in 1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 187090s. It was during the swadeshi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up. As these companies grew, the government began to exercise control on them. The Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' funds. By the mid21

1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided nationalise the life assurance business in India. The Life Insurance Corporation of India was set up in 1956 to take over around 250 life companies. For years thereafter, insurance remained a monopoly of the public sector. It was only after seven years of deliberation and debate - after the RN Malhotra Committee report of 1994 became the first serious document calling for the re-opening up of the insurance sector to private players -that the sector was finally opened up to private players in 2001. The Insurance Regulatory & Development Authority, an autonomous insurance regulator set up in 2000, has extensive powers to oversee the insurance business and regulate in a manner that will safeguard the interests of the insured.

Meaning of insurance: Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance is a collective bearing of risk. Insurance spreads the risks and losses of few people among a large number of people as people prefer small fixed liability instead of big uncertain and changing liability. Insurance is a scheme of economic cooperation by which members of the community share the unavoidable risks. Insurance can be defined as a legal contract between two parties whereby one party called insurer undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain. The other party called insured pays in exchange a fixed

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sum known as premium. The insurer and the insured are also known as Assured, or Underwriter, and Assured, respectively. The document which embodies the contract is called the policy. i) Principal of utmost good faith: It means maximum truth. All material information regarding the subject matter of insurance should be disclosed by both the parties- the insurer and the insured. This duty of full disclosure rests more heavily on the insured than the insurer. The insurer has a right to avoid the contract if the insured fails to make the full disclosure. ii) Principle of indemnity: This means that if the insured suffers a loss against which the policy has been made, he shall be fully indemnified only to the extent of loss. In other words, the insured is not entitled to make a profit on his loss. iii) Doctrine of subrogation: This means the insurer has the right to stand in the place of the insured after settlement of claims in so far as the insured right of recovery from an alternative source is involved. The purposes of subrogation are to hold the negligent third party any loss payments made to the insured. The purposes of subrogation are to hold the negligent persons responsible for the loss and prevent the insured from collecting twice for the same loss, iv) Principle of cause proxima: The cause of loss must be direct and an insured one in order to claim for compensation. v) Principle of insurable interest: The life or property insured. Insurable interest is that interest which considerably alters the position of the assured in the event of loss taking place and if the event does not take place, he remains in the same old position. One who has to lose as a result of loss may be said to have insurable interest in the life or property insured. If this principle is absent, the insurance contract degenerates into a wagering contract. It is taken as given that an individual has insurable interest in his\her own life or

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property. Cases where no proof of insurable interest is required are that of a husband’s interest in his wife’s life and wife’s interest in her husband’s life. In cases of business and family relationships, proof of insurable interest is required.

Types of insurance contract  Life insurance  General insurance

WHAT IS LIFE INSURANCE? Life insurance is a contract for payment of money to the person assured (or to the person entitled to receive the same) on the occurrence of the event insured against. Usually the contract provides for – Payment of an amount on the date of maturity or at specified periodic intervals or at death, if it occurs earlier. Periodical payment of insurance premium by the assured, to the corporation who provides the insurance.

Who can buy a life insurance policy? Any person above 18 years of age, who is eligible to enter into a valid contract, Subject to certain conditions, a policy can be taken on the life of a spouse or children.

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What is a Whole Life Policy? When most people think of life insurance, they think of a traditional whole life policy. These are the simplest policies to understand: You pay a fixed premium every year based on your age and other factors, you earn interest on the policy's cash value as the years roll by, and your beneficiaries get a fixed benefit after you die. The policy takes you into old age for the same premium you started out with. Whole life insurance policies are valuable because they provide permanent protection and accumulate cash values that can be used for emergencies or to meet specific objectives. The surrender value gives you an extra source of retirement money if you need it.

What is an Endowment policy? Unlike whole life, an endowment life insurance policy is designed primarily to provide a living benefit and only secondarily to provide life insurance protection. Therefore, it is more of an investment than a whole life policy. Endowment life insurance pays the face value of the policy either at the insured's death or at a certain age or after a number of years of premium payment. Endowment life insurance is a method of accumulating capital for a specific purpose and protecting this savings program against the saver's premature death. Many investors use endowment life insurance to fund anticipated financial needs, such as college education or retirement. Premium for an endowment life policy is much higher than those for a whole life policy.

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What is a Money Back policy?

This is basically an endowment policy for which a part of the sum assured is paid to the policyholder in the form of survival benefits, at fixed intervals, before the maturity date. The risk cover on the life continues for the full sum assured even after payment of survival benefits and bonus is also calculated on the full sum assured. If the policyholder survives till the end of the policy term, the survival benefits are deducted from the maturity value.

SCOPE OF LIFE INSURANCE Why do one need Life Insurance? Life insurance is designed to protect you and your family against financial uncertainties that may result due to unfortunate demise or illness. You can also view it as a comprehensive financial instrument – as a part of your financial planning offering you savings & investment facilities along with cover against financial loss. By choosing the right policy as per your needs i.e. customized solutions, you will be able to plan for a secure future for yourself and your loved ones.

Choosing the right plan Identifying the right plan basis your needs is the first crucial step towards insurance planning. At HDFC SLIC we help you through this decision by identifying your various needs and offering plans that are customized for you. You may also choose a plan for yourself by identifying the life stage you are at.

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Analyzing Needs The following needs of a person can be fulfilled by insurance:Protection Need for a sound income protection in case of your unfortunate demise

Investment Need to ensure long-term real growth of your money

Saving Save for the milestones and protect your savings too

Pension Need to save for a comfortable life post retirement Once you have analyzed your needs as per above classification, you need to then ascertain important factors such as type of cover, insurance amount as per one's income, life stage and dependents

Objectives of Life Insurance 1. To spread life insurance and provide life insurance protection to the masses at reasonable cost. 2. To mobilize peoples savings through insurance-linked savings schemes. 3. To invest the funds to serve the best interests of both the policy holders and the nation. 4. To conduct business with maximum economy, always remembering that the money belongs to the policy holders. 5. To act as trustees of the policy holders and protect their individual and collective interests. 6. To innovate and adapt to meet the changing life insurance needs of the community. 27

GENERAL INSURANCE General (non-life) insurance provides a short-term coverage, usually for a period of one year. General insurers transact fire insurance, motor insurance, marine insurance, and miscellaneous insurance business. Among these categories fire and motor insurance business are predominant. Motor vehicle insurance is compulsory in India and the motor insurance industry. Moreover, motor insurance due to third party liability claims has substantially contributed to underwriting losses.

General insurance Products •

Fire insurance :Fire Insurance is a comprehensive policy which covers loss on account of fire, earth

quake, riots, floods, strikes, and malicious intent. It can be taken only by the owner of the premises to be insured.

Motor Insurance:- The coverage is : In motor insurance, the rates were revised. Upwards twice, once in 1982 and then in1990 as the high cost of repairs coupled with third party claims had adversely affect the insured loss ratio. Motor insurance is Mandatory leading to good amount of premium collection but it is not being fancied upon as it could lead to litigation problem. •

Marine Cargo Insurance: This covers: a. Cargo in Transit. b. Cargo Declaration policy. It includes insurance of Marine Hull Insurance Inland Vessels, ocean going

Vessels, fishing and scaling vessels, freight at risk, construction of ships, voyage insurance

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of various vessels, ship breaking insurance, and offshore risks, including •

oil and energy in respect of onshore

construction risk.

No-Traditional/Rural: Including contractor’s all-risk cover and the marine-cum- Cattle/hens, crop, water pump for agriculture, hut, other livestock. Besides the traditional products, general insurers introduced longer-term contracts such as deferred health insurance and project insurance erection risk cover and credit insurance.

OBJECTIVE OF INSURANCE 1. The main Objective Of insurance behind the nationalization: Life Insurance to the rural areas and to the Socially and economically backward classes with a view to reach all insurable persons in the country and providing them adequate financial cover of reasonable cost. 2. Conduct business with utmost economy and with the full realization that the money to the public. 3. Meet the various life insurance need of the community that would arise in the changing social and economical environment. 4. Maximize mobilization of peoples’ saving by making insurance – linked securing adequately attractive. 5. Involve all people working in the corporation to the best of their capability in furthering the interests of the insurance public by providing efficient service with courtesy. 6. Bear in mind, the investment of funds, the primary obligation to its policy holders, whose money it holder in trust, without losing sight of the interest of the community as a whole; the fund is to be deployed to the best advantage of the investors as the 29

community as whole, keeping in view national as well as the community attractive return.

BENEFITS TO THE INSURANCE POLICY HOLDER (1) Tax Benefits: Relief in income tax is available for amount paid by way of premium for life insurance. investment qualifying for rebate viz. insurance premia, premium paid toward annuity plans for life insurance are specified under section 88(2) of the income tax Act.

(2) Safety: Saving through insurance guarantee financial Protection against risk of death of the police holder. In life insurance, on death, the full sum assured is payable (with bonuses wherever applicable) whereas in other saving scheme, only the amount (saved with interest) is payable.

(3) Liquidity: Loans can be raised on sole security of the policy which has acquired a paid-up value. Besides, a Life Insurance policy is also generally accepted as security for even a commercial loan/housing loan,

(4) Aid to Thrift: Life Insurance encourages ‘thrift’ Long term saving can be made in a relatively painless manner because of ‘easy installment facility’ (Premium can be made through monthly, quarterly half-yearly or yearly installment). The salary saving scheme, popularly known as SSS provide a convenient method if paying premium each month

30

through deduction from one’s salary. The salary saving

scheme can be introduced in

an institution of establishment subject to specified terms and condition.

(5) Money at the tine of Requirements: A suitable insurance plan or a combination of different plans can be taken to meet specific needs that are likely to arise in future such as children’s education, start in-life or marriage provision or even periodical needs for cash ones a predetermined stretch of tine. Alternatively, policy money can be so arranged to be used for other investments subject to certain conditions, loans are granted to policy holders for house or for purchase of flats.

(6) Insurance affords peace of mind: The security is the prime motivating factor. The security ends the tension and finally leads to peace to mind.

(7) Insurance Eliminate Dependency At the death of husband or the father or any lead person, the family would suffer a lot. The insurance is here to assist then like to provide adequate amount at the time of suffering. The economic dependency if the family is reduced.

(8) Insurance encourages savings:

31

In most of the life policies, element of saving is predominant, this policies combine of programme of Insurance and saving. Saving with insurance has certain extra advantage.

(9) Economic Growth of the country: For the growth of the country insurance provides string hand and mid to protect against loss of death. From the insurance government get more financial resource and utilize strengthen the economic condition of the country.

Brief overview of Indian insurance industry Other Insurance companies in India 

Aviva



Bajaj Allianz



Birla sun life



ICICI prudential



ING vysya



Life insurance corporation



Max New-York life



Metlife India



Om Kotak Mahindra



Reliance life insurance



SBI life insurance

32



Tata AIG

AVIVA The life insurance joint venture company between Dabur india and the Aviva UK. Dabur is one of the India’s oldest and largest group of companies with consolidated Annual turnover in excess of Rs 1,350 corers, country’s leading producer of traditional Healthcare products. Aviva Plc is UK’s largest and the world’s fifth largest insurance group. It is one of the leading providers of life & pension products to Europe and has substantial business elsewhere around the world.

Bajaj Allianz Bajaj Allianz Life Insurance co. Ltd. Is a joint venture between Allianz AG, and Bajaj Auto, one of the biggest 2 & 3 wheeler manufacturer in the world. Bajaj Auto Ltd, the Flagship Company of the Rs. 8000 crores Bajaj group is the largest manufacturer of two-wheelers and three-wheelers in India and one of the largest in the world.

Allianz Allianz group is insurers and financial service providers. Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost 174,000 employees. At the top of the holding company, Allianz AG, with its head office in Munich.

ING Vysya

33

ING Vysya Life Insurance company

private Limited entered the private life insurance

industry in India in September 2001, and in a short span pf 3 years has established itself as a distinctive Life insurance brand with an innovative, attractive and customer friendly product portfolio and a professional advisor force. It also distributes products in close cooperation with the ING Vysya Bank network. The company is headquartered at Bangalore

Birla sun life insurance company Limited Birla sun Life Insurance is the coming together of the Aditya Birla group & Sun Life Financial of Canada to enter the Indian insurance sector. The Aditya Birla Group, a multinational conglomerate has over 75 business units in India and Overseas with operations in Canada, US, UK, Thailand, Indonesia, Philippines, Malaysia, and Egypt. To name a few Foreign partner: Sun life assurance, sun life financials primary insurance business, has excellent rating with the world’s top rating agencies. With assets under management as on September 30, 2000 totaling more than CDN billion, it ranks amongst the largest international financial service organizations in the world.

METLIFE INDIA MetLife India was incorporated as a joint venture between MetLife International Holdings, inc. Jammu & Kashmir Bank, M Pallonji & Co and other private investors. MetLife India is headquartered in Bangalore with offices and presence in major Indian cities, and an additional 1000 outreach points through its channel partner.

ICICI Prudential Life Insurance

34

ICICI Prudential Life insurance is a joint venture between the ICICI group and Prudential Plc, of the UK. ICICI standard off its operation in 1955 with providing finance for industrial development, and since then it has diversified into housing finance, consumer finance , mutual funds to being a Universal Bank and its latest venture Life insurance. Foreign Partner Established in 1848, Prudential plc. Of U.K has grown to be the largest life insurance and mutual fund Company in U.K. Prudential plc. Has had its presence in Asia for the past 75 years catering to over 1 million customers across 11 Asian countries. Prudential is the largest Life Insurance company in the United Kingdom. ICICI and prudential came together in 1993 to provide mutual fund product in India and today are the largest private sector mutual fund company in India. Their largest venture ICICI Prudential Life plans to take care of the insurance needs at various stages of life.

MAX NEW YORK LIFE MAX India Max India Limited is a multi-business corporation that has business interest in telecom service, bulk pharmaceuticals, electronic components and specialty products. It is also the service-oriented businesses of healthcare, life insurance and information technology.

NEW YORK Life New York Life has grown to be a fortune 100 company and an expert in life

insurance. It

was the first insurance company to offer cash dividends to policy owners. In 1894, New York Life pioneered then unheard-of-concept of insuring women at the same rate as men.

35

Thereafter, it continued to introduce a series of firsts – a disability benefit clause in 1920, unemployment insurance in 1992 and complete customer care of the web in 1998. Today New York Life has over US billion in assets under management and over 30,000 agents and employees worldwide. The October 2000 fortune survey named New York

Life

amongst the top three most admired life and health insurance companies worldwide. With over 3 million policyholders, New York Life is a leading provider of insurance in a host of countries worldwide.

Life insurance corporation of India (LIC) The Life insurance Corporation was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and become synonymous with life insurance. Its main asset is its staff strength of 1.24 lakh employed and 2,048 branches and Over six lakh agency force.LIC has hundred divisional offices and has established extensive training facility. At all levels, At the apex, is the Management Development Institute, seven zonal Training Centre and 35 sales Training Centers. At the industry level, along with the Government and the GIC, it has helped establish the National Insurance Academy. It presently transacts individual group Insurance business, social security schemes and

Life Insurance business,

Pensions, grants housing loans

through its subsidiary and markets savings and Investment products through its mutual fund. it pays off about Rs 6,000 crore Annually to 5.6 million policyholders.

36

Om kotak mahindra life insurance Established in 1985 as Kotak capital management finance promoted by Uday kotak the company has come a long way since its entry into corporate finance. It has dabbled in leasing, auto finance, hire purchase, investment banking, consumer finance, broking etc. the company got its name Kotak Mahindra as industrialists Harish and Anand Mahindra picked a stake in the company. Kotak mahindra is today one of India’s leading Financial institute.

OLD Mutual:Old mutual plc is an international Financial service group in london with expanding operations in life assurance, asset management, banking and general insurance. OLD Mutual is listed on the London Stock Exchange and also on the south-African, Namibian, Malawi, and Zimbabwe stock exchanges. It has 156 years of experience in life insurance business.

OM Kotak Mahindra:OM Kotak Mahindra is the coming together of Kotak Mahindra Finance Ltd. and Old Mutual plc to enter the Indian insurance arena to offer a wide rang of innovative life insurance products.

Reliance Life Insurance:Reliance Life Insurance Company Ltd is a part of Reliance Capital Ltd. of

the Reliance –

Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading private sector Financial services Companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance capital has interests in asset management

37

and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. Reliance Capital Ltd is a Non-Banking Financial company (NBFT) registered with the Reserve Bank Of India under section 45-1A of the Reserve Bank of India Act, 1934.Reliance Capital sees immense Potential in the rapidly growing Financial service sector in India And aims to become a dominant player in this Industry and offer fully integrated financial services. Reliance Life Insurance is another step forward for Reliance Capital Ltd to offer need based Life Insurance solution to individual and corporate.

SBI Life Isurance:SBI Life Insurance Company Ltd is a joint venture between India’s largest bank, State Bank Of India and Cardiff S.A. a leading Life Insurance Company in France. State bank of India is a household name, and it stands as the last world for financial strength and security in the country. SBI’s background dates back to the year 1806 when it started business, as a presidency bank, known as bank of Bengal. Over the long journey, it has learnt to combine the best of banking practices handed down from the imperial management with the more Dynamic ways of doing banking in the modern India. It has grown as a responsible giant in the banking field over the years. Cardiff came into being in the year 1973. Since then it has grown into a vibrant insurance company specializing in personal lines such as long-term saving, protection products and creditor insurance. Cardiff had a premium income of over US$ 4 billion in 1999. And more than US$ 23 billion of funds under its management. Cardiff has been specializing in the art of selling insurance products through Commercial bank in France and 23 other countries. SBI Life Insurance Company Ltd is registered as a life Insurance Company with the Insurance Regulatory & Development Authority of India and has been issued License number 111 on

38

29th March 2001. the Company’s authorized capital is Rs. 250 crore, and the paid up capital at present Is Rs.125 crore. SBI owns 74% of the total equity , and Cardiff the balance 26%.

TATA AIG:The TATA AIG joint venture is a tie up between the established Tata Group and American International Group Inc. The TATA Group is one of the largest and most respected industrial houses in the country, while AIG is a leading US based insurance and financial service company with a presence in over 130 countries and jurisdiction around the world.

ABOUT IRDA

About the IRDA Composition of Authority under IRDA Act, 1999 As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority

The Authority is a ten member team consisting of (a) A Chairman; (b) five whole-time members; 39

(c) four part-time members, (all appointed by the Government of India)

Duties, Powers and Functions of IRDA Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA. (1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers

and

functions

of

the

Authority

shall

include,

(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel

such

registration;

(b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d)

Specifying

(e)

promoting

the

code

efficiency

of

conduct in

the

for

surveyors

conduct

of

and

loss

insurance

assessors; business;

(f) promoting and regulating professional organisations connected with the insurance and reinsurance business;

40

(g) Levying fees and other charges for carrying out the purposes of this Act; (h) Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other

organisations

connected

with

the

insurance

business;

(i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) (l)

regulating regulating

investment

of

maintenance

funds of

by

insurance

margin

of

companies; solvency;

(m) adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) supervising the functioning of the Tariff Advisory Committee; (o) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f); (p) Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) Exercising such other powers as may be prescribed

41

CHAPTER – 3 RESEARCH METHODOLOGY

42

RESEARCH METHODOLOGY Research is a common language refers to a search of knowledge. Research is scientific & systematic search for pertinent information on a specific topic, infect research is an art of scientific investigation. Research Methodology is a scientific way to solve research problem. It may be understood as a science of studying how research is don’t scientifically. In it we study various steps that are generally adopted by researchers in studying their research problem. It is necessary for researchers to know not only know research method techniques but also technology.

The scope of Research Methodology is wider than that of research methods. The research problem consists of series of closely related activities. At times, the first step determines the native of the last step to be undertaken. Why a research has been defined, what data has been collected and what a particular methods have been adopted and a host of similar other questions are usually answered when we talk of research methodology concerning a research problem or study. The project is a study where focus is on the following points:

RESEARCH DESIGN A research design is defined, as the specification of methods and procedures for acquiring the Information needed. It is a plant or organizing framework for doing the study and collecting the data. Designing a research plan requires decisions all the data sources, research approaches, Research instruments, sampling plan and contact methods.

43

Research design is mainly of following types: 1. Exploratory research. 2. Descriptive studies 3. Casual studies

EXPLORATORY RESEARCH The major purposes of exploratory studies are the identification of problems, the more precise Formulation of problems and the formulations of new alternative courses of action. The design of exploratory studies is characterized by a great amount of flexibility and ad-hoc veracity.

DESCRIPTIVE STUDIES Descriptive research in contrast to exploratory research is marked by the prior formulation of specific research

Questions. The investigator already knows a substantial

amount about the research problem. Perhaps as a Result of an exploratory study, before the project is initiated. Descriptive research is also characterized by a Preplanned and structured design. CASUAL OR EXPERIMENTAL DESIGN A casual design investigates the cause and effect relationships between two or more variables. The hypothesis is tested and the experiment is done. There are following types of casual designs: I.

After only design

II.

Before after design

III.

Before after with control group design

44

IV.

Four groups, six studies design

V.

After only with control group design.

VI.

Consumer panel design

VII.

Exposit facto design

B)

DATA COLLECTION METHOD

PRIMARY

SECONDARY

Direct personal Interview Indirect personal Interview

Published Sources

Unpublished Sources

Information from correspondents

Govt.publication

Mailed questionnaire

Report Committees & Commissions

Question filled by enumerators.

Private Publication Research Institute

Period of Study: This study has been carried out for a maximum period of 8 weeks.

Area of study: The study is exclusively done in the area of marketing. It is a process requiring care, sophistication, experience, business judgment, and imagination for which there can be no mechanical substitutes.

45

Sampling Design: The random sampling is done because any probability sampling procedure would require detailed information about the universe, which is not easily available further, it being an exploratory research.

Sample Procedure: In this study “random sampling procedure is used. Random sampling is preferred because of some limitation and the complexity. Area sampling is used in combination with random sampling so as to collect the data from different regions of the city and to iJhansiease reliability.

Sampling Size: The sampling size of the study is 100.

Method of the Sampling:

Probability Sampling It is also known as random sampling. Here, every item of the universe has an equal chance or probability of being chosen for sample. Probability sampling may be taken inform of:

Simple Random Sampling A simple random sample gives each member of the population an equal chance of being chosen. It is not a haphazard sample as some people think! One way of achieving a simple random sample is to number each element in the sampling frame (e.g. give everyone on the Electoral register a number) and then use random numbers to select the required sample.

46

Random numbers can be obtained using your calculator, a spreadsheet, printed tables of random numbers, or by the more traditional methods of drawing slips of paper from a hat, tossing coins or rolling dice.

Systematic Random Sampling This is random sampling with a system! From the sampling frame, a starting point is chosen at random, and thereafter at regular intervals.

Stratified Random Sampling With stratified random sampling, the population is first divided into a number of parts or 'strata' according to some characteristic, chosen to be related to the major variables being studied. For this survey, the variable of interest is the citizen's attitude to the redevelopment scheme, and the stratification factor will be the values of the respondents' homes. This factor was chosen because it seems reasonable to suppose that it will be related to people's attitudes

Cluster and area Sampling

Cluster sampling is a sampling technique used when "natural" groupings are evident in a statistical population. It is often used in marketing research. In this technique, the total population is divided into these groups (or clusters) and a sample of the groups is selected. Then the required information is collected from the elements within each selected group. This may be done for every element in these groups or a subsample of elements may be selected within each of these groups. 47

Non Probability Sampling It is also known as deliberate or purposive or judge mental sampling. In this type of sampling, every item in the universe does not have an equal, chance of being included in a sample.

It is of following type:

Convenience Sampling A convenience sample chooses the individuals that are easiest to reach or sampling that is done easy. Convenience sampling does not represent the entire population so it is considered bias.

Quota Sampling In quota sampling the selection of the sample is made by the interviewer, who has been given quotas to fill from specified sub-groups of the population.

Judgment Sampling The sampling technique used here in probability > Random Sampling. The total sample size is 100.

Data Collection : Data is collected from various customers through personal interaction. Specific questionnaire is prepared for colleting data. Data is collected with mere interaction and formal discussion with different respondents and we collect data in Aviva Life Insurance Company India Ltd.

48

and face to face contact with the persons from whom the information is to be obtained (known as informants). The interviewer asks them questions pertaining to the survey and collects the desired information. Thus, the we collect data about the working conditions of the workers of Aviva Life Insurance Company India Ltd.; we worked at Aviva Life Insurance Company India Ltd. and contact the workers and obtain the information. The information obtained are first hand or original in character.

49

CHAPTER – 4 DATA ANALYSIS

50

DATA ANALYSIS Q.1. Respondent age group

14%

22% 18-30 30-45 45-60 60<

36% 28%

51

Q.2. Respondent income group (per year)

23%

27%

17%

Below 50,000

33%

50,000-1,00,000 1,00,000-2,00,000 >2,00,000

52

Q.3. Respondent’s Profession

20%

22%

Serviceman Businessman Professionals

31%

27%

others

53

Q. 4. Are you aware about life insurance?

37% Yes No 63%

54

Q. 5. Do you know about IRDA?

29% Yes No 71%

55

Q. 6. How many numbers of companies in life insurance are you aware of?

18% 27% One Two to Four 21%

Four to Eight Less then Eight

34%

56

Q.7. Do you know about AVIVA LIFE INSURANCE?

33% Yes No 67%

57

Q.8. Sources of awareness of AVIVA LIFE INSURANCE?

31%

27% Advertisement Friend circle Family member FC of AVIVIA 19%

23%

58

Q. 9. Do you have any life insurance policy in any company?

27%

Yes No 73%

59

Q.10. Do you have any life insurance policy in AVIVA LIFE INSURANCE?

32% Yes No 68%

60

Q.11. Which type of life insurance policy do you have?

13%

23%

Protection Plan Pension Plan Investment Plan

33%

Saving Plan

31%

61

Q.12. Are you satisfied with AVIVA LIFE INSURANCE Plans?

12% 29% Dissatisfied 26%

Average Satisfied Highly Satisfied

33%

62

Q.13. Are you satisfied with customer services given by the AVIVA LIFE INSURANCE?

7% 23% 33%

Dissatisfied Average Satisfied Highly Satisfied

37%

63

Q.14. Rank the AVIVA LIFE INSURANCE with other Insurance Companies in Noida.

10%

21% Best Good Average Bad

37% 32%

64

Q. 15. Do you know about any F.C. of AVIVA LIFE INSURANCE?

28% Yes No 72%

65

Q.16. Why do you invest in life insurance?

28%

22%

For risk cover For investment

21%

29%

For safe future return For tax benefits

66

CHAPTER – 5 FINDINGS

67

FINDINGS After analyzing and interpreting the collected data. The findings are as under. 1.

a.

HYPOTHESIS: Null Hypothesis: The null hypothesis is rejected because the result of survey in areas of JHANSI shows that people have much more interest in insurance sector then our assumption, i.e. more than 80% of people are interested in insurance sector.

Alternate Hypothesis: The alternate assumption was right. According to this peoples are more devoted in insurance sector.

b.

Null Hypothesis: Null hypothesis is rejected because it says that “Most of the population in the areas of JHANSI has no awareness about AVIVA.”

Alternate Hypothesis: Alternate hypothesis is accepted; because it says that 70% population which has awareness about AVIVA. The awareness of IRDA in JHANSI is very low. Only 8% of people know about the IRDA. The people who know about the IRDA these are mostly professional like as Advocate, CA and serviceman

While interacting with people of rural areas I found that a large portion of market i.e. approx. 85% is aware of insurance sector. 68

Till today people do not have a right concept about insurance sector, they relate it with death, besides as a security and investment for future etc.

Although a big percentage of population is aware about the private insurance companies. Out of which only 70% are aware about an AVIVA life insurance company.

The people who have the life insurance policy of any company their percentage is very high it is 69% and only 31% people in JHANSI don’t have any type of insurance policy of any company.

In the JHANSI there are percentage of people who know the AVIVA is very high but ratio of people have the life insurance policy are very low only 19% of people have the policy of AVIVA and rest 81% don’t have the policy of AVIVA but they have the life insurance policy of other companies.

50% of the surveyed people have satisfied perception regarding AVIVA, while 29% have average perception.15% of the surveyed people have highly satisfied perception and Rest 6%. have dissatisfied perception.

69

CHAPTER – 6

RECOMMENDATIONS AND SUGGESTIONS

70

RECOMMENDATIONS AND SUGGESTIONS Followings are the recommendations and the suggestions not only for the Aviva life insurance company but also for other private life insurance companies if the want to complete with public/government life insurance companies.

1. Creating positive image: Private companies should try their level best to create positive and favorable image in the minds of people i.e. in the minds of their target customers.

2.

Training and development of F.C.:

Company must provide training to their agents and financial so that the can satisfy customer and doubts effectively.

3.

Concern towards customers:

Serious concern must be given to the customers as in today’s scenario it regarded as “Customer is a king”. In formal words we can say that if can customers more loyal towards the company.

4.

Agency holder must be well educated:

The Company should give agency to that person who is well educated and can convince the customer b handling his queries and doubts.

5. Co-operation with agents and branch managers: The Company must full co-operate with branch managers and agents.

71

6.

Availability of branch offices:

There must be the branch offices in each20-30 Km. areas;

7.

Efficient management:

The management appointed must be that much capable that it can control the whole team and improve the goodwill and image of the company.

8. Sales promotion and marketing: The marketing department must be so aggressive that it can have a close watch on the competitors’ activities. Not only this but also it must take care of the need and wants of the customers also.

9.

Incentive schemes and permanency in job:

There must be good incentive schemes to be designed as these can acts as good motivators for the agents. The scheme of permanent job placement must be introduce for those F.C. and agents who have shown extra ordinary performance.

10. Solution of Grievances: There must regular meetings with the financial consultants and agents to motivate them and to solve grievances if there are any.

72

CHAPTER –7 LIMITATION

73

LIMITATIONS Although every effort has been in to collect the relevant information through the sources available, still some relevant information could not be gathered.

 Busy Schedule of Concerned Executives: The concerned executives were having very busy schedule because of which they were reluctant to give appointment.

 Time: The time duration could not provide ample opportunity to study every detail of the company.

 Unawareness: Executives were unaware of many terms related to same while asking to them.

 Confidential Information: As the company on account of confidential report has not disclosed some figures. Moreover, in some cases separate accounts of division are not separately maintained thereby, leading to restrictions in study.

74

CHAPTER – 8 CONCLUSION

75

CONCLUSION

The size of the market has grown and size of the insurable population in India is needed vast and the existing player has managed to cover amount one – fourth of it. The opportunities before the players are therefore a plenty in terms of target audience.

Life Insurance has today become a mainstay of any market economy since it offers plenty of scope for garnering large sums of money for long periods of time. A well – regulated Life Insurance industry which moves with the times by offering its customers tailor made products to satisfy their financial needs is, therefore, essential if we desire to progress towards a worry free future.

People used to buy Insurance for tax exemption but time has changed now, advertising has made the people understand the need of Life Insurance in their lives and people are taking initiatives to buy it. Urge of people to have Insurance and strong marketing can really make the industry reach the sky.

76

GLOSSORY

77

GLOSSORY

Contract

The common name for a scheme or policy

Corporate Governance A term used to describe the way in which rights and responsibilities are shared in the business world. In particular, how companies are managed, including the structure of boards, the duties of directors, executive remuneration, and how and when important information is shared with the market. Statutory bodies, self-regulation and codes of best practice may set standards.

Critical illnesses cover a life insurance policy with the benefits payable on diagnosis of one of a number of specified medical conditions.

Bull An investor who expects share prices to rise or, more generally, has an optimistic outlook. A bull market is a period of rising share prices. The opposite of bear.

Capital

Money invested typically in buildings and machinery.

Capital Gain

The profit made on the sale of investments, such as shares or property.

Capital gains tax the tax paid on any profit or gain made by selling something for more than it was bought.

78

Capital growth

IJhansiease in the value of an investment reflected in the higher selling

price.

Claim

A call by a policyholder to the benefits payable under an insurance policy or

scheme.

Commission

Payment made to a salesman, agent or other intermediary, normally in

return for selling an insurance or investment policy.

Compliance

The requirement to operate in accordance with statutory or regulatory

guidelines. In the insurance industry, the most important compliance rules come from the Insurance Regulatory Development Authority (IRDA). Most insurance companies have compliance teams whose role is to ensure that the company follows all the necessary rules and

Assets

Anything of value owned by a business that can be set against its liabilities.

Assets are usually divided into four types: fixed assets (typically land, buildings and machines); current assets (cash, stock, investments, work in progress and payments owing); liquid assets (cash or funds held in a form that can be quickly converted into cash); and intangible assets (goodwill, trademarks, patents, etc

79

Asset Management

Investment

management

service

provided

by

financial

institutions on behalf of their clients. Assurance

A term sometimes used instead of "insurance", generally in connection with life

business, since assurance implies the certainty of an event (such as death) and insurance only the probability.

Auditor

A firm of accountants who check ("audit") a company’s accounts and decide

whether the published report is accurate.

Balance Sheet

A statement showing the financial position of a business on a specific

date by listing its assets (what it owns) and its liabilities (the claims on its assets, or what it owes).

Banc assurance

An arrangement whereby banks sell insurance and investment products

to their customers on behalf of other financial providers. Bear

An investor who expects share prices to fall or, more generally, has a pessimistic

outlook about the market. A bear market is a period of falling share prices. See also bull.

Bid Price

What the market will pay, or what a seller will receive, for a particular share

80

Bid/offer spread

the difference between the buying price (bid) and the selling price

(offer) of units in an investment. The mid-price is the middle point between the two and is often the price quoted in newspapers. Also called the bid/ask spread.

Blue Chip A description usually applied to the biggest and most highly regarded companies quoted on the stock market, shares in whom are considered a reliable and profitable investment.

Bond

Technically a certificate of debt issued to raise funds, often with a fixed rate of

interest and a fixed repayment date. An example is gilt-edged securities ("gilts") issued by the government to borrow from investors via the stock market (also known as fixed interest securities).

Broker

A professional intermediary who arranges insurance on behalf of an individual

or company with an insurance company, and represents the policyholder in negotiations and administration of that insurance with the insurer.

81

BIBLIOGRAPHY

82

BIBLIOGRAPHY/REFERENCE

Books Referred • Marketing Management

by Rama Swamy

• Research and Market Decisions

by Paul E. Green, Donald S. Tull, Gerald

•

Financial Management

by Khan & Jain

Internet Resources •

Search Sites

www.google.com, www.msn.com

•

Websites of the organization

www.aviva.com, www.avivaindia.com

•

Other site

www.bimaonline.com

Company Resources • Product Brochures and Company Manuals • Inputs from company personnel • Aviva Investor

83

ANNEXURE

84

QUESTIONNAIRE NAME OF

RESPONDENT:………………………………………………………………

GENDER:…………………………………………………………………… ADDRESS:………………………………………………………………… CONTACT NUMBER:…………………………………………………… RESERCHER NAME: RANJIT SINGH

•

•

•

Respondent age group 18-30( )

30-45( )

45-60( )

60<( )

Respondent income group(per year) Below 50,000( )

50,000-1,00,000( )

1,00,000-2,00,000( )

>2,00,000( )

Respondent’s Profession Serviceman( )

Businessman( )

Professionals( )

others( )

85

•

Are you aware about life insurance Yes( )

•

Do you know about IRDA Yes( )

•

•

1( )

2-4( )

4-8( )

>8( )

Do you know about AVIVA LIFE INSURANCE No( )

Sources of awareness of AVIVA LIFE INSURANCE Advertisement ( ) Family member( )

•

No( )

How many numbers of companies in life insurance are you aware of

Yes( ) •

No( )

Friend circle( ) FC of AVIVIA ( )

Do you have any life insurance policy in any company Yes( )

No( )

86

•

Do you have any life insurance policy in AVIVA LIFE INSURANCE Yes ( )

•

•

No( )

Which type of life insurance policy do you have Protection Plan ( )

Pension Plan ( )

Investment Plan ( )

Saving Plan ( )

Are you satisfied with AVIVA LIFE INSURANCE Plans? Dissatisfied ( ) satisfied

•

Average ()

()

highly satisfied ( )

Are you satisfied with customer services given by the AVIVA LIFE INSURANCE? Dissatisfied( ) satisfied

•

•

()

()

highly satisfied ( )

Rank the AVIVA LIFE INSURANCE with other Insurance Companies in Noida. Best ( )

Good ( )

Average ( )

Bad ( )

Do you know about any F.C. of AVIVA LIFE INSURANCE? Yes ( )

•

Average

No ( )

Why do you invest in life insurance?

87

For risk cover ( ) For investment ( ) For safe future return ( ) For tax benefits ( )

Remarks………………………………………………………………………………… …………………………………………………………………………………………… …………………………………….. DatePlace-

Respondent signature

88