Ajay Final Project

A SUMMER TRAINING REPORT ON A STUDY ON CUSTOMERS’ ATTITUDE TOWARDS LIFE INSURANCE PRODUCTS AT BHARTI AXA LIFE INSURANCE

SUBMITTED IN THE PARTIAL FULFILMENT FOR THE REQUIREMENT OF THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) TO

MAHARSHI DAYANAND UNIVERSITY ROHTAK SUBMITTED BY:AJAY MBA (3 RD SEM.) ROLL NO.: 2801

AMITY BUSINESS SCHOOL, MANESAR

(2008-10) DECLARATION

I, Ajay, Roll No. 2801 of M.B.A (3rd Semester) of the Amity Business School, Manesar, here by declare that Summer Training Report entitled, “A study on customers’ attitude towards Life Insurance Products” is an original work and the same has not been submitted to any other institute for the award of any other degree.

A seminar presentation of the Training Report was made on 10-08-2009 and the suggestions by the faculty were duly incorporated.

Presentation Incharge (Faculty)

Signature of the Candidate

Countersigned Director of the Institute

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ACKNOWLEDGEMENT

It is my privilege to acknowledge the contribution of all helping hands for their cooperation and guidance that enabled me in framing the analysis. First and foremost, I feel immense pleasure in expressing my sincere thanks and profound sense of gratitude to Dr. R C Sharma, Professor and Advisor, Amity Business School, Manesar, without whose support and encouragement, I would not have achieved what I have accomplished today. His consistent support and cooperation showed the way towards the successful completion of the project. I sincerely thank to my project guide Mr. Mohit Yadav, Agency Development Manager in Bharti AXA life insurance company ltd. for his unending support and guidance throughout the course of my summer training and to do a challenging and satisfying project. I extend my deepest thank to my faculty guide Prof (Dr.) Vikas Madhukar for his inspiring and affectionate guidance during my project and for providing me the necessary information whenever required. Finally, I express my sincere gratitude to all those with whom I worked & whose thoughts and insights helped me in furthering my knowledge and understanding of this subject.

AJAY

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TABLE OF CONTENTS

Certificate Declaration Acknowledgement

Chapter I Significance of the study Conceptualization Objectives of the study Limitations of the study

1 2 4 5

Industry Profile Company Profile

7 18

Review of Existing Literature Research Methodology

32 35

Analysis and Interpretation

38

Findings Recommendations Conclusions

47 48 49

Bibliography

50

Chapter II

Chapter III

Chapter IV Chapter V

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SIGNIFICANCE OF THE STUDY The Insurance industry in India is growing at the rate of 15-20% annually. Together with banking services, it adds about 7 per cent to the country’s GDP. In spite of these growth statistics, the penetration of insurance in the country is very poor. The data reveals that nearly 80% of Indian population is without any insurance cover, which indicates immense growth potential for the insurance sector in India. Keeping above in mind, the study has been conducted to judge the customers’ attitude towards life insurance products. The study analyses the customers’ perception about life insurance products of Bharti AXA, which will be useful for the company in understanding the needs and expectations of the customers and also in knowing about the awareness level of their products. This understanding will facilitate the company in designing the suitable and competitive insurance plans and to gain the competitive advantage over its competitors, which will contribute in increasing the sales of the company and ultimately increasing the market share.. Further, the study is also useful for the readers to understand the life insurance product of the company.

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CONCEPTUALIZATION Awareness is defined as A person’s knowledge and individuals skills of any person how a person is aware about a particular products & innovations given by the company to the consumer.. Customer Satisfaction can be defined as supplying or gratifying all wants or wishes, fulfilling conditions or desires, or the state of the mind anything that makes a customer feel pleased or contented. Consumer Behavior: Consumer behaviour is defined as the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services ideas, or experiences to satisfy needs and desires Insurance policies cover the risk of life as well as other assets and valuables, such as home, automobiles, jewellery, etc. On the basis of the risk they cover, insurance policies can be classified into two categories: Life insurance and general insurance. As the term suggests, life insurance covers the risk involved in a person's life, while general insurance provides financial protection against unforeseen events, like accident, flood, earthquake, disease, fire and burglary. General insurance also covers injury due to accident or hospitalisation for illness and surgery can also be insured. Your liabilities to others arising out of the law can also be insured and is compulsory in some cases like motor third party insurance. Besides, term life insurance or term assurance is life insurance which provides coverage for a limited period of time, the relevant term. In fact, term life insurance is the original form of life insurance and is considered to be the pure insurance protection because it builds no cash value.

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Should the insured person pass away, the family is protected by a certain amount. There are three key factors to be considered in term insurance: face amount (protection or death benefit); premium to be paid (cost to the insured); and length of coverage (term). A common type of term is called annual renewable term. It is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. A policy holder insures his life for a specified term. If he dies before that specified term is up, his estate or named beneficiary receives a payout. If he does not die before the term is up, he receives nothing. In the past these policies would almost always exclude suicide. Insurance is an attractive option for investment but most people are not aware of its advantages as an investment option. Remember that first and foremost, insurance is about risk cover and protection. Insurance also serves as an excellent tax saving mechanism. The government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Insurance Regulatory & Development Authority is regulatory and development authority under government of India in order to protect the interests of the policy holders and to regulate, promote and ensure orderly growth of the insurance industry

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OBJECTIVES OF THE STUDY

1.

To understand the insurance business and products of Bharti Axa life insurance Co. ltd.

2.

To know about the customers’ perception and preferences about life insurance.

3.

To examine the satisfaction level of the customers.

4.

To analyses the customers’ awareness about life insurance companies.

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LIMITATIONS OF THE STUDY

•

The study was limited to a period of June-July 2009.

•

Some respondents were not willing to give any answer to the questions.

•

Time was the biggest limitation. The project requires a thorough study which requires a considerable amount of time.

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CHAPTER -II

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INDUSTRY PROFILE History of insurance sector in India

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and

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London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Association of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices. In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973.

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This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra. The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 where in, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders’ interests. In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002. Today there are 23 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.

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The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the country’s GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country. The business of life insurance in India in its existing form started in India in the year 1818 with the

establishment

of

the

Oriental

Life

Insurance

Company

in

Calcutta.

Some of the important milestones in the life insurance business in India are: 1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital

contribution

of

Rs.5

crore

from

14

the

Government

of

India.

Some of the important milestones in the general insurance business in India are: 1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance

business

in

India

with

effect

15

from

1st

January

1973.

Insurance Regulatory and Development Authority (IRDA) The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto."

Role 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 the code of conduct for surveyors and loss assessors; (e) promoting efficiency in the conduct of insurance business; (f) promoting and regulating professional organisations connected with the insurance and reinsurance business; (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

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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) regulating investment of funds by insurance companies; (l) regulating maintenance of margin of 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

Expectations The law of India has following expectations from IRDA 1. To protect the interest of and secure fair treatment to policyholders; 2. To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy; 3. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates;

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4. To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard; 5. To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressed machinery; 6. To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players; 7. To take action where such standards are inadequate or ineffectively enforced; 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;

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Market share of the company Bharti AXA have 1% market share in the insurance industry. And ICICI got 21.6% market share in the private insurance sector.

COMPETITORS 19

ICICI Prudential Life Insurance Company:ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom.

LIC :Life Insurance Corporation (LIC) came into existence on 1st September 1956 through the amalgamation of 154 Indian insurance companies, 16 non-Indian companies and 75 provident. The amalgamation was achieved with the help of Life Insurance Act passed by the Parliament in the same year. The LIC was created with the goal of reaching all the insurable people in the country and providing them financial coverage at a reasonable price. In the year 1956, LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. With time there was a need for a branch office at every district headquarter and many branches were opened, which raised the pace of the organization. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil.

HDFC Standard Life Insurance Company Ltd:HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance institution and a Group Company of the Standard Life, UK. HDFC as on December 31, 2008 holds 72.38 per cent of equity in the joint venture.

Standard Chartered:-

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Standard Chartered offers you a wide range of Life Insurance Products from Bajaj Allianz Life Insurance Company, one of India's leading Insurance companies. At Standard Chartered, you can avail of the services of trained & certified professional consultants from Bajaj Allianz Insurance company, who can guide you in ascertaining your insurance needs, and assist you in making an insurance plan that is just right for you.

Contact Address Bharti AXA Life Insurance Co. Ltd. Unit 601 & 602, 6th Floor Raheja Titanium, Off Western Express Highway Goregaon (East), Mumbai - 400063 Website: www.bharti-axalife.com

COMPANY PROFILE

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Bharti AXA Life Insurance is a joint venture between Bharti, one of India’s leading business groups with interests in telecom, agri business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, we have over 8000 employees across over 12 states in the country and a national footprint of distributors trained to provide quality financial advice and insurance solutions to the large Indian customer base. As we further expand our presence across the country with a large network of distributors, we continue to provide innovative product and service offerings to cater to specific insurance and wealth management needs of customers. Whatever your plans in life, you can be confident that Bharti AXA Life will offer the right financial solutions to help you achieve them. Bharti enterprises Bharti Enterprises is one of India’s leading business groups with interests in telecom, agri business, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of India’s leading private sector providers of telecommunications services with an aggregate of 60 million customers, spanning mobile, fixed line, broadband and enterprise services. Bharti Airtel was ranked amongst the best performing companies in the world in the BusinessWeek IT 100 list 2007. Bharti Teletech is the country’s largest manufacturer and exporter of telephone terminals. Bharti has a joint venture with ELRo Holdings India Ltd. – ‘Field Fresh Foods Pvt. Ltd’ - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - ‘Bharti AXA Life Insurance Company Ltd.’ - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture – ‘Bharti Wal-Mart Private Limited’ – with Wal-Mart, for wholesale cash-and-carry and back-end supply chain management operations.

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Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with WalMart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management.

Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - Mobile Services, Airtel Tele media Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Tele media Services business offers broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand.

Bharti is the “first” •

To launches India’s first private sector National Long Distance service

•

Mobile service to cross the three million customer mark and to cross 1,00,000 in Himachal

•

To launch world’s first Flexi-Recharge prepaid coupon for its customer

•

To announce innovative outsourcing to enhance Quality of Customer Services

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•

To launch talk-time transfer service for its pre-paid customers in Delhi

To win the prestigious “MIS Asia IT Excellence Award 2005”

Awards •

Airtel wins the “World Communication Best Brand Award”

•

Bharti Tele-Ventures is the “Asian Mobile news Mobile Operator Of the Year”

•

Airtel chosen as “Most Preferred Mobile Service” by CNBC Awaaz Consumer Awards

•

Bharti Tele-Ventures is the Indian Mobile Operator of the Year 2005

•

Bharti wins Silver Trophy at the CII National Six Sigma Awards

•

Bharti Tele-Ventures amongst the top technology companies in the World-Business Week

•

Bharti foundation wins Golden Peacock award for corporate social responsibility.

AXA Group AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro 5,140 million. The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA.

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AXA Asia Pacific Holdings

AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock exchange and is 52.3% owned by AXA SA. AXA APH is responsible for AXA SA’s life insurance and wealth management businesses in the Asia-Pacific region. It has operations in Australia, New Zealand, Hong Kong, Singapore, Indonesia, Philippines, Thailand, China, India and Malaysia. AXA APH had A$106.4 billion in total funds under management and administration at 30 June 2007 and reported a profit after tax before non-recurring items of A$374.0 million for the six months ended 30 June 2007. AXA Group is a worldwide leader in financial protection and wealth management. AXA's operations are diverse geographically, with major operations in Western Europe, North America, and the Asia/Pacific area. AXA had Euro 1315 billion in assets under management as of DEC. 30, 2008 and reported revenues of approximately Euro 79 billion for 2007. IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro 5,140 million.

The AXA ordinary share is listed and trades on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE.

Bharti AXA Life Insurance

Bharti AXA Life Insurance is a joint venture between Bharti, one of India’s leading business groups with interests in telecom, agri business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 25

26% stake of AXA. The company launched national operations in December 2007. Today, we have over 5200 employees across over 12 states in the country. Our business philosophy is built around the promise of making people "Life Confident”. The CEO of Bharti AXA Life Insurance is Mr. Nitin Chopra.

Vision: To be a leader and the preferred company for financial protection and wealth management in India.

Values:•

Professionalism

•

Innovation

•

Team Spirit

•

Pragmatism

•

Integrity

Strategy:•

To achieve a top 5 market position in India through a multi-distribution, multi-product platform

•

To adapt AXA's best practice blueprints as a sound platform for profitable growth

•

To leverage Bharti's local knowledge, infrastructure and customer base

•

To deliver high levels of shareholder return

•

To build long term value with our business partners by enhancing the proposition to their customers

•

To be the employer of choice to attract and retain the best talent in India

•

To be recognised as being close and qualified by our customers

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SWOT analysis of Bharti AXA Life insurance

Strength •

Bharti AXA gives the special training to the agents

•

Joint venture between the good financial protection company AXA

Weakness •

Less awareness about Bharti AXA life insurance Among people

•

Less distribution channel

Opportunities •

A large amount of Indian people is under Insurance cover.

•

People having Insurance cover are not adequately covered 94% insured people are under insured.

Threats •

A large competition in the market with 23 life insurance companies which they are giving the life insurance services.

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PRODUCTS & SERVICES

Individual Plans:Bharti AXA Dream Life Pension:A Unit Linked Pension Product Dream Life Pension, Bharti AXA Life Insurance’s unique pension product ensures that your retirement life is your Dream Life. Live your Dreams! Be Life Confident. Key Benefits: •

Unmatched flexibility for retirement wealth creation o

Pay one time lump sum or regular premiums

o

At the inception systematically increase your premiums by 5 % or 8% each year with the Accumulator Option

•

o

Increase/decrease premiums any time after the 2nd policy year

o

Add top up premiums any number of times after the 1st policy year

Dream Life Pension enhances your retirement kitty by providing special addition, starting from the end of 10th policy year

•

Change your planned retirement age any time during the policy term

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•

Obtain tax benefits as per the prevailing tax laws on the premiums paid and the benefits received under the policy.

Bharti AXA Life Aspire Life:Unit Linked Endowment Product. Aspire Life helps you create a pool of wealth to meet your long-term needs, while also providing you adequate protection in case the need arises. Key Benefits: •

Allocation rates as high as 100% i.e. no allocation charges for premiums greater than or equal to Rs.50,000 on your investment in the unit-linked fund from year 2 - to maximize your investment returns.

•

Up to 175% of the first year premium paid by you is returned as Guaranteed Special Addition, at maturity of the policy or on unfortunate event of death of the Life Insured.

•

3 investment fund options as per your investment preferences.

•

Flexibility of partial withdrawals after fifth Policy Year, premium holiday option after seven policy years and facility to switch amongst the investment funds as per your investment objectives.

•

Protection benefit which provides high Sum Assured for longer policy terms.

•

Tax benefits under section 80C and 10(10D) of Income Tax Act.

Bharti AXA Life Invest Confident:Unit Linked Single Premium Product.

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You have always strived hard to achieve the best for you and your loved ones, so when it comes to making an investment decision, we know that you would expect the best from it too.

Key Benefits: •

Convenient single premium product with policy benefit period till the age of 70.

•

Unique special additions starting from the end of 5th policy year and thereafter at the end of every 5 years till the maturity date.

•

3 investment fund options as per your investment preferences.

•

Basic Sum Assured of five times the single premium.

•

Unique option of investing additional amount at your convenience through Top Up Premiums.

•

Flexibility of partial withdrawals after the third Policy Year

•

Additional benefit of Rs.5,00,000 in the event of death due to an accident.

•

Tax benefits under section 80C and 10(10D) of Income Tax Act.

Bharti AXA Life Wealth Confident:A unit-linked investment cum protection policy. Your wealth, your status ensures that you get preferential status wherever you go. So why shouldn't your money get the same? Wealth Confident, a unit-linked investment cum protection product, with its limited period premium payment facility of 5 years, premium payment flexibility, higher allocation of your

30

premium for investment, unique special additions and life insurance benefit, not only makes your money grow but also provides your investment the special treatment that it deserves. "Be confident of providing your investments the right mix of growth, flexibility and loyalty benefits. Live confident with Wealth Confident." Key Benefits: •

Pay premium for five years, while your policy continues for ten years.

•

Higher allocation of your premium up to 88% for investment.

•

Special additions of units added every year from 6th Year for incremental wealth creation.

•

Choose from four different investment funds to meet your financial objectives.

•

Five times the life cover of your annual premium.

•

Tax benefit under 80C and 10(10D).

Bharti AXA Life Future Confident:A unit-linked policy which offers comprehensive protection along with wealth creation in the long term Key Benefits: •

Life insurance benefit of up to 420 times the monthly premium.

•

Comprehensive overall protection through "Protection Enhancers" in the form of riders.

•

Wealth creation for your long term financial needs.

•

Special additions at regular intervals, starting from 7th year, to enhance your wealth.

•

Four different investment funds to meet your financial objectives.

•

Tax benefit under 80C and 10(10D).

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Bharti AXA Life Future Confident II:A unit-linked product which offers enhanced protection along with wealth creation in the long term. Key Benefits: •

Build Wealth for your long term financial needs with enhanced financial protection.

•

Sum assured up to 420 times the monthly premium.

•

Life insurance benefit as Sum assured PLUS Policy fund value.

•

Four different investment funds to meet your financial objectives.

•

Comprehensive overall protection through "Protection Enhancers" in the form of riders.

•

Special additions at regular intervals, starting from the end of 7th year, to enhance your wealth.

•

Tax benefit under sections 80C and 10(10D) of Income Tax Act.

Bharti AXA Life Save Confident:Traditional money back insurance product for long term savings Your changing life stages decide your financial milestone planning. When you foresee intermittent financial requirements in the years to come, like regular expenses related to your child’s education, liquidity becomes a key aspect of your planning along with long term savings, and protection for your family. Key Benefits: •

Traditional money back product with payment term of 10 years.

•

Get guaranteed amount back on specified intervals, starting from 6th policy year till maturity.

•

Amount equal to 110% of Sum Assured paid across 10 years.

•

Secured growth on savings with Annual Reversionary Bonus, if declared, every year.

•

Savings enhanced by Terminal Bonus, if any, payable at maturity. 32

•

Total protection for your family with guaranteed sum assured plus accrued bonuses.

•

Added protection in the event of death due to an accident with payment of additional amount equal to the basic Sum Assured, subject to maximum of Rs 10 Lakh.

•

Tax benefit under sections 80C and 10(10D) of Income Tax Act, 1961.

Bharti AXA Life Secure Confident:A Long Term Life Insurance All of us desire to maximise the happiness for our family at all times, irrespective of the circumstances. The thought of unfortunate events befalling us may cause us anxiety about providing a secured happiness to our loved ones.

Key Benefits: •

Term Assurance for 5, 10,15,20,25 years.

•

Financial protection against unfortunate event of death at an affordable cost.

•

Comprehensive overall protection with help of riders.

•

Tax benefit under section 80C and 10(10D) of Income Tax Act.

Group Plans:Bharti AXA Life Mortgage Credit Shield:Mortgage Credit Shield is a Group Product that provides coverage to people who have availed of a Mortgage\ Home loan\ Home equity loan from an Institution/Bank.

Bharti AXA Life Credit Shield:Credit Shield is a Group Product that provides coverage to people who have availed of a loan for1 to 5 years from Group Policyholder.

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ORGANISATION STRUCTURE:

CHIEF EXECUTIVE OFFICER (CEO)

DIRECTOR OF HUMAN RESOURCE

V

MANAGERS

CFO & ACTUARIOL

CHIEF MARKETING OFFICER

CHIEF OPERATING OFFICER

CHIEF DISTRIBUTION OFFICER

MANAGERS

MANAGERSSS SS

MANAGERS

MANAGERSSS SS

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VP TELCASSURANCE

APPOINTED ACTUR

MANAGERS

MANAGERSSS SS

CHAPTER - 3

35

REVIEW OF EXISTING LITRETURE For long, policyholders in India shunned term insurance plans in favour of endowment policies Term insurance is the most basic life insurance policy where the only benefit is a compensation past few years, unit-linked insurance plans (Ulips), which boast of a seemingly irresistible combination of investment, insurance and tax saving. Insurance agents too have actively been pushing Ulips as these have helped pump up premium volumes. While the level of premium has gone up, the purchase of protection has not been commensurate with the growth in incomes. There are other factors for rate reduction as well. These include deepening insurance penetration and the reduction in solvency margins prescribed by IRDA and availability of better mortality data — which helps companies ascertain the risks better. Insurers have been able to reduce cost of high-value policies further because well-heeled urban Indians, enjoying the fruits of a blossoming economy, are seeing marked improvement in mortality rates. Their life expectancy is enhanced by the quality of their lifestyle and access to best-in-class healthcare facilities, leading to low probability of death due to natural causes. Consequently, insurance companies do not view offering them inexpensive term cover as a risky proposition. This, coupled with the increasing demand from this segment, has swollen the volumes, which in turn, have contributed to shrinking rates. Therefore, life insurers’ margins for the term insurance portfolio haven’t come under pressure. Sustaining the premiums at these levels doesn’t seem likely to hit a roadblock in the future and, in fact, there are signs that the market could see low-cost insurance scaling new highs in the coming days. “Offering pure term insurance at cheaper rates for HNI consumers is an idea, which we might see more of in the near future,” says Manik Nangia, corporate vice-president and head, product management, Max New York Life Insurance. The thumb rule for buying a protection cover dictates that the sum assured should be equal to 100 times the insured’s monthly income. Though this estimate is generally considered to be

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accurate, there is a view that to ensure complete peace of mind, the basic term cover could be enhanced with riders like critical illness and disability benefit. The rationale behind this argument is that in the event of an accident resulting in severe physical impairment or a serious ailment, the term cover will be rendered ineffective as it comes into play only after the insured’s death. More complaints against insurance………. A 12 % jump in the number of life insurance policies sold in April-June this year has resulted in only 0.95% rise in new premium Collections as consumers preferred smaller investments in an economic downturn. Life insurers collected Rs 14,456 crore as new premium in the first quarter of this fiscal compared to Rs 14,320 crore during the corresponding period last year, according to data released by the Insurance Regulatory and Development Authority (IrDA). The companies sold 84.5 lakh policies in this fiscal year’s first quarter. State-run Life Insurance Corporation, meanwhile, collected Rs 9,028 crore from 59 lakh policies in the first quarter, up 20% over the corresponding period of last fiscal. The public sector insurer sold 48 lakh policies in the year-ago period. The 23 private life insurers sold 25.4 lakh policies in this period, collecting Rs 5,427 crore in premium from new products — a decline of 20% on Rs 6,795 crore premium collections during the corresponding period last fiscal year. “Insurance is not a priority when it comes to consumer spending. The maximum sale of insurance products happens only during the last quarter of every financial year when consumers look at ways to save tax,” said an executive at a private insurer. Officials from LIC of India, New India Assurance, Oriental Insurance, ICICI Lombard, HDFC Standard life and SBI Life attended the seminar.

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Pratima Chatterjee (2009) pointed that a 12 % jump in the number of life insurance policies sold in April-June this year has resulted in only 0.95% rise in new premium. Collections as consumers preferred smaller investments in an economic downturn.

Sanjay Kumar, Jha, zonal manager for north and head of pension business at Bajaj Allianz. “Sale of life insurance products remained flat during the first quarter of the current fiscal year. Consumers prefer to invest smaller amounts in insurance products,” Life insurers collected Rs 14,456 crore as new premium in the first quarter of this fiscal compared to Rs 14,320 crore during the corresponding period last year, according to data released by the Insurance Regulatory and Development Authority (IrDA). The companies sold 84.5 lakh policies in this fiscal year’s first quarter. State-run Life Insurance Corporation, meanwhile, collected Rs 9,028 crore from 59 lakh policies in the first quarter, up 20% over the corresponding period of last fiscal. The public sector insurer sold 48 lakh policies in the year-ago period. Account only 2.5% of the country's GDP, while general insurance premiums are at only 0.65%. The insurance sector in India offers immense growth opportunities. The potential can be judged by the fact that today life insurance premiums

The sector has been thrown open for private participation, but the largest life insurance company in India is still owned by the government, known as Life Insurance Corporation. While the rest of the world is in grip of an economic downturn and the year 2009 is witnessing a downtrend in the life insurance industry, with almost flat growth, India for the very first time has been ranked amongst the top10 life insurance markets worldwide. The facts, data and reports for the year 2008-09 state that insurance sector penetration, both in life and non-life segments, has improved since the time the sector has been opened for private participation.

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RESEARCH METHODOLOGY NATURE OF RESEARCH: Research Design is descriptive & exploratory in nature because descriptive research deals with present and it is related with why, what, where, how.etc. And exploratory we have to explore the data. It constitutes the blueprint for collection, measurement and analysis of data.

RESEARCH TYPE: The design used for carrying out this research is Qualitative in nature.

DATA TYPE: In this research the type of data collection is: •

Primary data

•

Secondary data

DATA SOURCE: The sources of collection of secondary data are: •

Books

•

Websites

•

Magazine

•

Brochure

Data source: the source of collection of primary data •

Questionnaire

•

Interview

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UNIVERSE: The universe is Gurgaon city.

SAMPLING SIZE & DESIGN: Sample of 100 was taken the sample size of 100 individuals were selected on the basis of Convenient sampling technique.

ANALYSIS PATTERN To analyse and present the data in more meaningful way, various graphical and presentation techniques have been used in the study.

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CHAPTER - 4

41

ANALYSIS AND INTERPRETATION: Data collection through questionnaire and personnel interview resulted in availability of the desired information but these were useless until there were analyzed. Various steps required for this purpose were editing, coding and tabulating. Tabulating refers to bringing together similar data and compiling them in an accurate and meaningful manner. The data collected by questionnaire was analyzed, interpreted with the help of table, and pie chart.

Ques1. Age of the respondents:a) 20 – 30[

] b) 30 – 40[

] c) 40 – 50[ ] d) Above 50 [ ]

AGE 8% 20%

40 - 50

32%

30 - 40 20 - 30 above50

40%

PARTICTULARS 20 to 30 30 to 40 40 to 50

NO.OF.RESPONDENT 40 32 8

PERCENTAGE 40% 32% 8%

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Above 50 TOTAL a) b) c) d)

20 100

20% 100

40% of the respondents are between 20 to 30 years old. 32% of the respondents are between 30 and 40 years of age. 8% of the respondents are between 40 and 50 years of age. 20% of the respondents are more than 50 years of age.

Ques2. Occupation of the respondents:a) Student [ ] [ ]

b) Business [ ]

c) Service [ ]

d) Other

OCCUPATION 12%

40%

12%

student business service 4thQtr

36%

PARTICULARS Student Business man Service Other TOTAL

NO.OF.RESPONDENT 12 12 36 40 100

a) 12% of the respondents are businessmen. b) 12% of the respondents are students. c) 37% of the respondents are service. d) 40% of the respondents are in others category. 43

PERCENTAGE 34% 12% 36% 40% 100%

Ques3. According to you, what you consider when you purchase the life insurance policy? a) Investment. [ ]

b) Security. [ ]

c) Claim [ ]

d) all of the above [ ]

CONSIDER ABOUTTHELIFEINSURANCE POLICY 30% 50% 10% 10%

• • • •

10% respondents said about investment. 10% respondents said about security. 30% respondents said about claim. 50% respondents said all of the above.

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Ques4. Which plan do you prefer? a) Traditional [ ]

b) Modern.[ ]

c) ULIP [ ]

PREFERANCE

25% 50%

25%

• • •

25% respondents want to prefer traditional plan. 25% respondents want to prefer modern plan. 50% respondents want to prefer ULIP plan.

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Ques5. According to you, what is your perception about life insurance?

a) To Help Pay for Your Children's Education. [ ]

b) To Replace Lost Income.[ ]

c) To cover final expenses [ ]

d) all of the above [ ]

PERCEPTIONABOUTTHELIFE INSURANCE To Help Pay for Your Children's Education.

30% 50% 10%

To Replace Lost Income. to cover final expenses

10%

all of the above

• • • •

50% respondents said life insurance is to help pay for your children education. 10% respondents said life insurance is to replace lost income. 10% respondents said life insurance is to cover final expenses. 30% respondents said life insurance to all above the features which we discuss above.

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Ques6. Are you satisfied with the returns which are given by the life insurance company? a) Yes [ ]

b) No [ ]

• 80% are satisfied with the service given by the company. • 20% are dissatisfied with the company.

Que7. What is the reason for dissatisfaction? ……………………………………………………………………………………….. ………………………………………………………………………………………..

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………………………………………………………………………………………... Ques8. Are you Aware about the competition between the life insurance companies?

a) Yes [ ]

b) No [ ]

CONCERNABOUTTHE

COMPITITION

10%

yes no 90%

10% are not concern about the competition in the market. • 90% are aware about the competition in the market. •

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Ques9. Which factor of the following you will be concern about while you are purchasing a product?

a) Allocation [ ] c) Fund administration [ ]

• • • •

b) Fund management [ ] d) All of the above [ ]

15% are concern about allocation when purchasing the product. 10% are concern about fund management when purchasing the product 15% are concern about fund administration when purchasing the product 60% are concern about all of the above when purchasing the product

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Ques10. Which is your biggest concern for future?

a) Child education [ ] b) Retirement [ ] c) Child’s marriage [ ] d) Medical illness [ ]

• • • •

45% respondent’s future concerned was child education. 2O% respondents’ future concerned was retirement. 15% respondent’s future concerned was child marriage. 20% respondent’s future concerned was medical illness.

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FINDINGS •

The respondents in the age group of 20-30 are more inclined towards the life insurance products.

•

While invest in the life insurance policy 90% are aware about the company in the market.

•

The 50% respondent’s perception that child education is the biggest benefit of life insurance is.

•

The 80% respondents are satisfied with the returns which are given by the company.

•

Some respondents are dissatisfied due to the not proper information in beginning and long term time process.

•

The 50% respondents prefer the ULIP plan.

•

The 80% respondents aware about the competition in the market between life insurance companies.

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RECOMMENDATIONS

•

Emphasis should be laid more on advertisement and building brand awareness through different modes of communication. This will facilitate in creating more awareness about the product of the company.

•

To provide all types of benefits to the customers to make their perception positive, this in turn will increase their satisfaction level.

•

Company should require encouraging the customer for more invest in the life insurance policy.

•

Company can enhance its competitive position by focusing more on better customer services as compared to the competitors.

•

Proper product training should be given to the financial advisors of the company so that they may be able to explain about the various positive aspects of the product to the prospective customers. That will increase to their selling skills and eventually increase the sales.

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CONCLUSIONS The study has been conducted on Bharti AXA Life Insurance Company Limited and the main objective of the study was to examine the customers’ perception and satisfaction level towards the products of the company. A descriptive and exploratory research design has been adopted and a sample of 100 respondents was taken from the Gurgaon city. Convenient sampling technique has been used to choose the sample unit. It was found that the most of the respondents are aware about the benefits of insurance and have high preference towards life insurance products. They invest in these products due to a number of reasons, viz., child education, and retirement benefit, safety of their family in case of death and also for return. The majorities of the respondents are aware about the company’s name but may not find it suitable as it is a new company and still required to build-up trust amongst the customers. Thus it is suggested that the company should invest more in advertising and brand building to build the trust and to reach to the customers.

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BIBLIOGRAPHY BOOKS  Kothari, C.R. (2005), Research Methodology, New Age International (P) Ltd.  Kotler, Philip (2005), Marketing Management, Pearson Education.  Parsuram A, Grewal Dhruv, Krishnan R (2004), Marketing Research, Biztantra.  Ramaswamy and Namakumari, Marketing Management-Global Prospective, Macmillan Business Books.

NEWSPAPER 

Paramita Chatterjee (2009), “Lifeless premium collections upset coverage”, The Economic Times of India, July 29

MAGAZINES & JOURNALS  Business Today  Economics Times

WEBSITES  www.bhartiaxalifeinsurance.com  www.lic.com

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