Analysis And Interpretation

The Indian assurance industry is featured by the attributes: Low market penetration; •

Ever-growing middle class component in population. Growth o( consumer

•

Movement with an increasing demand (or better assurance products;

•

Inadequate application of information technology for business. Adequate

•

Fillip from the Government in the form of tax incentives to the assured, etc.

The industry formations need to keep vigil on these characteristics of the Indian market and formulate their strategies to entail maximum contribution to the output of the sector. The Indian life and non-life assurance business accounted for merely 0.42 percent of the world's life and non-life business in 1997. The figures of the basic parameters of the industry's performance viz assurance Density and assurance Penetration also are evident of the hitherto existing law-yeild Indian market conditions. The term "assurance Penetration" broadly measures the contribution of the assurance industry in relation to a nation's entire economic productivity. The figure of premium vis-à-vis the GOP of 1999 stood at 0.54 percent for non-life assurance business and 139 percent for the life assurance business the term "assurance Density" reflects the assurance purchasing power. The premium per capita in India amounted to US S 2.40 for assurance and US S 6.10 for life assurance in 1999 but with the deregulation of the sector, a sea change in the scene is most likely. The assurance sector in India has come a full circle from being an open competitive market to Nationalization and back to a liberalized market again Tracing the developments in the Indian assurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

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Structure of the Assurance Industry The structure of the assurance industry comprises of the Operating department, Administrative department and the finance department The Operating Department generally performs the basic functions pertaining to the designing of products, marketing thereof, servicing the insured, the insured, management ol portfolio, etc. The Administrative Department looks alter the day-to-day affairs of the company. The Finance Department backs the operations and administration of the company by accounting for the transactions, streamlining the flow of funds, materializing the management decisions, etc.

The Administration Department as well as the Finance Department, usually, functions through in-house setup. The Finance Department functions in the areas of accounting, financial and management reporting, budgeting and controlling, etc. and thus renders enormous scope for finance professionals. The new entrants in the assurance sector are likely to call for the services of the Chartered Accountants for their financial setup requirements. The Chartered Accountants have engaged themselves in the audit of assurance Companies since long. With the transition in the insurance sector, the horizons for their contribution have broadened. There has, emerged a king-size pool of opportunities that the Chartered Accountants can explore and apply their professional wisdom and experience to.

Basic Functions Of The Assurance Industry

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1. Risk Perception and Evaluation: The fundamental function of an insurer is to provide a cover against me detriment caused to the insured due to the happening of certain specified and agreed events. Thus, prior to providing inch umbrella through a product, the insurer has to assess the risk involved in the transaction. The insurer has to identify the element of risk prevalent in the concerned Industry or a particular unit The perception of risk requires the study of variables through various methods including the application of scientific and statistical techniques and correlation thereof with the Industry or unit under study in light of there basic environmental and infra-structural characteristics

2. Designing the Insurance Product: On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks. While designing an insurance product, an insurer decides its cost to be charged from the insured in the term of premium, reduction thereof in certain cases like not lodging any darn during the previous covered period(s). Suggesting the implementation of risk-mitigating measures, etc

3. Marketing of the Product: The core function of the marketing force of an insurance company is to generate awareness about the Insurance products among the target market But m the Indian scenario, where the insurance penetration Is too low as compared lo the other nations, the marketing force needs to perform the pro-active role in developing an insurance culture. It is through the efficiency of the sales force of an insurance company that the desirability and the success of a product are determined. Adequate knowledge of the insurance industry, products and the modalities attached therewith. Further, the marketing personnel should be adequately backed by the back-office setup.

4. Selling of the Products:

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The term selling in the context of Assurance industry connotes the issuance of policies to the applicant proposer. The Assurance basically embodies the covenant between the insurer and the insured wherein the former agrees to indemnify the latter [or the loss caused to him on the happening of the certain agreed events up to a specified limit. The life insurance policy generally contains the agreement whereby the insurer agrees to pay to the insured or the beneficiary of the policy an agreed amount on the expiry of the term of the policy or in the event of the death of the insured respectively. The additional benefits in the shape of Riders viz . Accidental Death Benefit . Double Sum Assured . Critical Illness benefits: Waiver of Premiums, etc. can also be appended with the policy on the payment of an additional premium.

5. Management of Portfolio:

The management of the portfolio includes the assessment of requirement of funds, identification of various sources of finance, the evaluation of the sources in the light of their cost, availability, timing , etc.. reconciling the features of various sources with the needs of the company and the selection of appropriate conjunction of sources . The insurer possesses huge amount of funds, which need proper management the management of the portfolio of an insurance company requires the identification of investment avenues, evaluation thereof and the selection of the most appropriate mix of alternatives where the funds of the company can be invested. The selection requires the knowledge of finance related functions and techniques apart from the in-depth know of the patterns of requirement of funds in the company as well as in the industry as a.

Types Of Assurance Schemes

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There are a wide variety of assurance schemes that cater la your needs, whatever your age, financial position, risk tolerance and return expectations. Whether as the foundation or your investment programmed or as a supplement, assurance schemes can help you meet your financial goats? (A) By Structure •

Open-Ended Scheme

These do not have a fixed maturity. You deal with the assurance (or your investments and redemptions. The key feature is liquidity. You can conveniently buy and sell your units at Net Asset Value (NAV) related prices, at any point of time.

•

Close-Ended Schemes

Schemes that have a stipulated assurance period (ranging from 2 to 15 years) are called close ended schemes. You can invest in the scheme at the time of the initial issue and thereafter you can buy or sell the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchange could vary from the schemes on account of demand and supply situation, unit holders' expectations and other market factors. One of the characteristics of the close-ended schemes is that they are generally traded at a discount to NAV; but closer to maturity, the discount narrows. Some close-ended schemes give you an additional option of selling your units to the assurance company through periodic repurchase at NAV related prices. SEBI Regulations ensure that at least one of the two exit routes are provided to the investor under the close ended schemes.

•

Interval Schemes

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These combine the features of open-ended and close-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during predetermined intervals at NAV related prices. (B) By Investment Objective •

Growth Schemes

Aim to provide capital appreciation over the medium to long term. These schemes normally invest a majority of their funds in equities and are willing to bear short term decline in value for possible future appreciation. These schemes are not for investors seeking regular income or needing their money back in the short term. Ideal for • Investors in their prime earning years. • Investors seeking growth over the long term.

•

Income Schemes

Aim to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited. Ideal for • Retired people and others with a need for capital stability and regular income. • Investors who need some income to supplement their earnings.

•

Balanced Schemes

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Aim to provide both growth and Income by periodically distributing a part of the Income and Capital gains they earn. They invest in both shares and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace or fall equally when the market falls. Ideal for: Investors looking for a combination of income and moderate growth

•

Money Market / Liquid Schemes Aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short term instruments such as treasury bills, certificates of deposit, commercial paper and inter bank call money. Returns on these schemes may fluctuate, depending upon the interest rates prevailing in the market. Ideal for: •

Corporate and individual investors as a means to park their surplus funds for short periods or awaiting a more favorable investment alternative.

Other Schemes-

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Tax Saving Schemes (Equity Linked Saving Scheme - ELSS).Special Schemes•

Fixed maturity plans.

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Exchange trade funds (ETFs).

•

Capital protection oriented schemes.

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Gold exchange trade funds (GETFs).

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Company Profile Of

The New India Assurance Com. Ltd.

About - New India Assurance Company Limited New India Assurance Company is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 1068 offices, comprising 26 Regional offices . 393 Divisional offices and 648 branches. With approximately 21000 employees. New India has the largest number of specialist and technically qualified personnel at all levels of management, who are empowered to underwrite and settle claims o( high magnitude 18

New India has been rated "A-" (Excellent) by A.M.Best Co. making it the only Indian insurance company to have been rated by an international rating agency. Rating based on following factors: Superior Capital Position Strong Operating Performance Only Company to develop significant International operations, long record of successful trading outside India. Shri M. D. Mallaya, Chairman & Managing Director. Bank of Baroda. Has been appointed as Director The New India Assurance Company limited Since its inception in 1994, has emerged as TATA Financial Services Inc. One of India's leading financial managing assets o( a large investor base. The fund offers a range of investment options, which include diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds. a wide range of debt and treasury products and onshore funds. New India Assurance Company Limited follows a long-term, fundamental research based approach to investment the approach is to identify companies, which have excellent growth prospects and strong fundamentals. The fundamentals include the quality of the company's management, sustainability of its business model and its competitive position, amongst other factors TATA Financial Services Inc. Company has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in. TATA Financial Services Inc. Strives to provide transparent, ethical and researchbased investments and wealth management services. International presence Overseas operations commenced in 1920. Operations in 24 countries in the year 2004-05. Network of 19 Branches, 12 Agencies. 2 Associate companies and 2 Subsidiary companies In the year 2004-05. Overseas Premium of Rs. 892.35 cores in the year 2004-05, which accounts for more than 80% of total overseas premium in India. Company Strengths Largest number of Offices - In India and Abroad Trained and technically qualified staff 1068 fully computerized offices across India. "A-" (Excellent) rating by A.M Best & Co (Europe) First domestic company to be rated by an International Rating Agency Rating based upon following factors; Superior capital position Strong operating

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performance Strong market position Only company to develop significant International operations, long record of successful trading outside India Pioneers • First company lo set up an Aviation Insurance Department in 1946. • First company to handle the Hull Insurance requirements of the Indian Shipping

Fleet. • First company to establish its own Training School. • First company to introduce the concept of 'Model Office Training*. • First company lo create department in Engineering insurance.

Vision To be the most trusted name in Investment and wealth management, to be the preferred employer in the industry and to be a catalyst for growth and excellence of the asset management business In India. The vision is to make assurance Company the dominant new insurer in the life insurance industry. This it hopes to achieve through our commitment to excellence, focus on service, speed and innovation, and leveraging our technological expertise. The success of this organization will be founded on its strong focus on values and clarity of purpose. These include: •

Understanding the needs of customers and offering them superior products and

•

To be the first choice insurer for customers

• To be the preferred employer for staff in the insurance industry. • To be the number one insurer for creating shareholder value. •

Leveraging technology to service customers quickly, efficiently and

conveniently.

Mission GOAL- THE PHILOSOPHICAL GOAL. The assurance Company collects money in the farm of premium from individuals (A. B, C & D). The money collected from people is used to meet one person's calamity. The assurance Company enters into the process of canalizing by disbursing the amount collected into the command economy. Thus a significant part of the activities 20

of the insurance industry of an economy entails mobilization of domestic savings and its subsequent disbursal to investors. The main risk faced by the assurance company is when all the Assurors claim far the reimbursement at the same time. This situation is very rare to occur, and is one of the major threat that the assurance company faces in its business operations. To provide financial security to individuals, trade, commerce and all other segments of the society by offering insurance products and services of high quality at affordable To consistently pursue investor's wealth optimization by achieving superior and consistent investment results. To develop general insurance Business in the best interest Creating a conducive environment to hone and retain talent. •

Providing customer delight.

•

Institutionalizing system-approach in all aspects of functioning.

•

Upholding highest standards of ethical values at all times.

Values •

Highest priority to customer needs

•

High standards of public conduct

•

Transparency in operations.

Company Performance New India Assurance Company is the largest non-life Insurer in India. The financial strength of the Company is reflected from the following

( Rs in crore)

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gross Year

gross

net

net

total

net

premium premium

premium

profit

assets

worth

(in India)(outside

( global) (global)

(global) (global)

India)

Business Focus The business focus is to position themselves as a leading corporate & retail Insurance company catering to the needs of our customers. At General Assurance, the guiding principles are customer service and client satisfaction. All efforts are directed towards understanding the culture, social environment and individual insurance requirements of the customers so that they can cater to their varied needs.

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They are working closely with leading Intermediaries Including corporate agents; motor dealers; agents; banks; associations and other intermediaries to locus on the corporate and retail business. Assurance leverages the customer base and expertise of Tata Auto Ltd. They are technology driven and strive to set up world-class technological infrastructure. This will include a renowned insurance software; networking of all offices and intermediaries as well as the ability to interface with customers via all media.

Overview: The new India assurance Co. charted a growth of 73.04% during the year with the asset under management (AUM) as on March 31. 2008 increasing to Rs. 44863.89 crores from a level of Rs. 21,047 crores as on March 31, 2007. Debt & Cash Schemes, together, grew by around 90% in this fiscal year The Investor base of the Fund grew from 11,45,345 to 18, 90,102 in this fiscal year. The new India assurance Co.- 3 & 5 Year Plan, a close ended capital protection oriented scheme was launched on June 20. 2007 with an objective to seek capital protection by investing in high quality fixed income securities maturing in line with the tenure of the scheme and seeking capital appreciation by Investing in equity and equity related Instruments. Also, the new India assurance Co. Value, a 3-year close ended diversified equity scheme with an automatic conversion into an open-ended scheme upon maturity to generate consistent long-term capital appreciation by investing predominantly in equity and equity related securities by following value investing strategy, was launched on January 17. 2008.

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The new India assurance Equity Fund - Plan A & B, open-ended diversified equity scheme with an objective to generate long-term growth of capital, by investing predominantly in a diversified portfolio of equity and equity related securities in the domestic and international markets, was launched September 17. 2007. The new India assurance Co. Lite Special Situations an open-ended diversified equity scheme with an objective to generate longterm capital by investing in a portfolio of equity and equity related securities. The scheme would follow an investment strategy that would take advantage of Special Situations & contrarian investment style. The scheme was launched on December 17. 2003. The new India assurance Co. Life Long Term Advantage Fund- Series 1; a 3-year dose ended Small and Midcap equity scheme with an automatic conversion into an open-ended scheme upon maturity which seeks to generate consistent long-term capital appreciation by investing predominantly in equity and equity related securities of companies considered to be small and mid cap. The Scheme may also invest a certain portion of its corpus in fixed income securities including money market instruments, in order to meet liquidity requirements from time to time. The scheme was launched on May 31. 2007. We also launched 35 Fixed Term Plans (FTPs) of various maturities in this fiscal year. On the Debt side most of the mobilizations were concentrated in FTPs.

Consistency: We strive to deliver consistent results through our value-based investing methodology, keeping alive the credo of the late doyen of the TATA Group, Mr. Sir Dorab Tata that money received from the people should go back to them several limes over.

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Flexibility: The new India assurance offers Investors a broad range of managed investment products in various asset classes and risk parameters. Win operational flexibility to suit their varied investment needs.

Stability: Our commitment to the highest quality of service and integrity is the foundation upon which we build trust with our clients. Service: We offer a wide range of services to assist investors have a fulfilling and rewarding financial planning experience with us. We have designed our services keeping in mind the needs of our investors, giving them a smooth and hassle-free financial planning process A Proud Pedigree The new India assurance is a part of the Govt. of India, one of India's largest and most respected industrial groups, renowned for its adherence to business ethics. The Group has always believed in returning wealth to the society that it serves. Thus, nearly two-thirds of the equity of Tata group, the Group's promoter company, is held by philanthropic trusts. which have created a host of national institutions in the natural sciences, medical care, energy and the arts. The trusts also give substantial annual grants and endowments to deserving individuals and institutions in the areas of education, healthcare and social uplift By

combining

ethical

values

with

business

acumen,

globalization with national interests and core businesses with emerging ones, the Tata Group aims to be the largest and most respected global brand from India. This way, it fulfils its 25

long-standing commitment to improving the quality of life of its stakeholders.

Leadership with Trust Our purpose al The new India assurance is to improve the quality of life of the communities we serve. We do this by attaining leadership positions in sectors of national economic significance, to which the Group brings a unique set of capabilities. This requires us to grow aggressively in focused areas of business. Our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. It is an ongoing process, continuously enriched by the formalization of the high standards of behavior that we expect from employees and companies.

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The Tata name is a unique asset, representing leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the route to sustained growth and long-term success.

Rural-Urban Mix Customer View's It must be borne in mind that India is a predominantly rural country and will continue to be so in the near future. New players may tend to favor the 'creamy" layer of the urban population. But, in doing so, they may well miss a large chunk of the insurable population. A strong case in point is the current business composition of predominant market leader - the Life Insurance Corporation of India. The lion's share of its new business comes from the rural and semi-rural markets. In a country of 1 billion people, mass marketing is always a profitable and cost-effective option for gaining market share The rural sector is a perfect case for mass marketing. Competition in rural areas lends to be "kinder and gentler" than that in urban areas, which can easily be termed cutthroat And the generally smaller policy amounts in rural areas would be more than offset by the higher volume potential in these areas in contrast with urban areas. Identifying the right agents to harness the full potential o( the vibrant and dynamic rural markets will be imperative. Rural insurance should be tacked upon as an opportunity and not an obligation. A smaller bundle of innovative products in sync with rural needs and perception and an efficient delivery system are the two aspects that have to be developed in order to penetrate the rural markets.

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Product

profile

Product Profile

A. Products & Policy 1. Commercial Products Policy 1.1

Jewellers Block Policy

1.2

Bankers Indemnity Policy

1.3

Shopkeepers Policy

1.4

Marine Cargo Policy

1.5

Plate Glass Insurance 28

1.6

Special Contingency Policy

1.7

Neon Sign Insurance

1.8

Multi Peril Policy for L P G. Dealers

1.9

Fidelity Guarantee Insurance Policy

1.10

Marine Hull Policy

1.11

Aviation Insurance

2. Personal Products Policy 2.1

Pravasi Bharatiya bima yojna Policy

2.2 Personal Accident Policy 2.3 Householders Pokey 2.4 Motor Policy 2.5 Money Insurance 2.6 Rasta Apatti Kavach (Road Safety Insurance) 2.7. TV/VCR/VCP Insurance 2.8 Mobile/Cellular Phone Insurance 2.9 Other Personal Insurance 3. Liability Policy 3.1. Public Liability Policy 3.2. Products Liability Policy 3.3

Professional Indemnity Policy

3.4. Lift (Third Party) Insurance 3.5. Employers' Liability Policy 3.6. Carrier's Liability Insurance 3.7.

Liability Insurance Ad Policy

3.8.

Golfers Indemnity Insurance

4. Industrial Policy 4.1. Fire Policy 4.2. Burglary Policy 4.3.

Machinery Breakdown Policy

4.4. Contractors All Risk Policy 29

4.5. Marine cum Erection / Storage cum Erection Policy 4.6. Advanced Loss of Profit / Delay in Startup Policy 4.7. Contractor Plant and Machinery Policy 4.8. Mega Package Policies 5. Social Policy 5.1 Universal Health Insurance Scheme 5.2. Jan Arogya Bima Policy 5.3 Raj Rajeshwari mahila Kalyan Yojana 5.4 Bhagyashree Child Welfare Policy 5.5.

Janata Personal Accident Insurance

5.6.

Student Safely Insurance

5.7.

Ashrya Bima yojana

5.8.

Rural Insurance

The Total Product Concept The Total Product Concept (TPC). which implied that a product had three levels of features and the consumption, was in totality. Level : 1 Core Product: In the Insurance Industry the core product is the policy that provides protection to the consumers against the risks. This is the main reason for which the Insurance Company is in existence. It provides protection by way of various riders viz.

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Accidental Death Benefit. Double Sum Assured. Critical illness benefits. Waiver of Premiums, etc. On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks. While designing an insurance product, an insurer decides its cost to be charged from the insured in the form of premium, reduction thereof in certain cases like not lodging any claim during the previous covered period(s), suggesting the implementation of risk-mitigating measures, etc. The features of a product should be flexible enough to provide for the determination of premiums, rebates, additional premiums, etc depending upon the risk benchmarks as determined.

Level: 2

Formal Product: When the customers expectations grow synchronized with increased competition the marketer otters some tangibility to the existing core product to differentiate itself from the competitors. 1. Brand:

In order to distinguish itself from the competitors, the Insurance Company gives a brand name to its policy. This brand name gives an identity to the product (policy) offered by the insurance company.

2. Attributes:

Just giving a brand name to the policy may not be enough for the insurance company to distinguish its offerings. The product offering must also have attributes that will attract the consumers to take the policy. The attributes must suit and satisfy the needs wants and desires of the various types of consumers that the company is targeting at Thus ICICI is investment plans suit the consumers who want to secure their family through insurance or invest money for growth. And its retirement plans suit the ones who want lo enjoy (heir fruits of labor after retirement or want to go for a dream vacation.

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3. Instruction Manual: To make the service consumption easier for the consumers, the instruction manual win the policy becomes very important. The instruction manual gives an overview lo the consumers as lo how to go on with the filling of the application form. Ii also gives information about the various formalities that have lo be adhered to at the time of submission of the application form.

Level: 3

Augmented product: With further expectation of the consumer - again synchronized with intense competition - marketers offer more and more intangible features. 1. Post-sales service:

The insurance company must not consider it as the end of the service providing the consumer has taken once the policy. The functions of an insurance company include the provision of the Post-sales services to the consumer. Among the services

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rendered by the insurance company is the service of processing and release of claims. The insurance company needs to verify the accuracy of the facts presented in relation to the insurance claim and the documents produced in support thereof 2. Delivery points:

The delivery points can be the branches that the insurance company has at the discretion of the of the consumers' location. The delivery points can also be mobilized with the presence of the insurance agents. The agents can cover a wide area and gel in contact with the consumers to provide the service to him. 3. Customer education and training:

The customer education and training is very important for the insurance company. The agents play a vital role in this context. The customer can be educated on various benefits that can be accrued in his future life by taking a policy. This is where the agents' communication skills come into the picture. The insurance company has to play an active role in enabling the agents to impart the best customer education through appropriate training given to the agents. 4. Customer complaint management:

Customer complaints management with regards to delay in discharge of claims must be effectively handled by the insurance company to have competitive edge over its competitors. The complaint management will help the company to get the consumers closer to the organization as the consumers feel that their grievances are taken care of. Thus LIC has an online feedback system where the consumers of the policy can register their grievances. 5. Payment options:

The insurance company can offer payment options to the consumers with regards to payment of premium - the mode of payment and the period within which the premium amount has to be paid.

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•

India’s offices

Corporate

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Corporate head office address: The new India assurance company ltd. 87, M.G.Road, fort, Mumbai 400 001

*Domestic offices Ahmedabad Bangalore Baroda Bhopal Bhubaneshver Chandigarh Chennai Coimbatore Delhi RO 1 Delhi ROII Ernakulam Guwahati Hyderabad Jaipur Kanpur Kolkata Ludhiana Mumbai RO 1 Mumbai RO 2 Mumbai RO 3 35

Mumbai RO 4 Nagpur Patna Pune Surat

Overview of Product: At The new India assurance Company, we believe that your investment needs depend on personal and financial goals. Identifying your financial goals is the key lo achieving the big things in your life, be if your child's education or a carefree and comfortable retired life. After identifying and defining your financial goals, you now need to plan for each of them in an organized and a professional way. Investment experts around the world advise instruments like equity funds and stocks for long-term (more than 5 years), income funds for medium-term and liquid funds for short-term needs. The investment matrix here depicts the entire available variety of investment options. Those at the top provide for a greater opportunity for long-term capital growth while those at the bottom take care of current income and reasonable return & liquidity. Tata Fund offers a wide range of funds for different investment instruments designed to cater to your individual profile and life-stage.

Systematic Investment Plan:

The Systematic Investment Plan (SIP) is a simple and time honored investment strategy for accumulation of wealth in a disciplined manner over long term period.

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The plan aims at a better future for its investors as an SIP investor gets good rate of returns compared to a one time investor. A specific amount should be invested (or a continuous period at regular intervals under this plan. SIP is similar to a regular saving scheme like a recurring deposit. It is a method of investing a fixed sum regularly in a mutual fund. SIP allows the investor to buy units on a given date every month. The investor decides the amount and also the mutual fund scheme. While the Investor's investment remains the same, more number of units can be bought in a declining market and less number of units in a rising market. The investor automatically participates in the market swings once the option for SIP is made. SIP ensures averaging of rupee cost as consistent investment ensures that average cost per unit fits in the lower range of average market price. An investor can either give post dated cheques or ECS instruction and the investment will be made regularly in the mutual hind desired for the required amount SIP generally starts at minimum amounts of Rs.1000/- per month and upper limit for using an ECS is Rs.25000/- per instruction. For instance, it one wishes to invest Rs.1. 00.000/- per month, then they need to do it on four different dates. Fund Products are divided in following scheme:

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Types Of Schemes Wide variety of Fund Schemes exists to cater lo the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry Frequently Used Terms Net Asset Value (NAV) Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. Sale Price Sale Price Is the price you pay when you invest in a scheme'' Also called Otter Price It may include a sales load. Repurchase Price Repurchase price is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price. Redemption Price Redemption price is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. Sales Load

Sales load is a charge collected by a scheme when it sells the units. Also called, 'Front-end' load. Schemes that do not charge a load are called 'No Load' schemes. Repurchase or 'Back-end' Load Repurchase or back-end load is a charge collected by a scheme when it buys back the units from the unit holders.

Last 10 years

Performance Highlights For The Year 2002-03 2002-03 was yet another year of impressive growth and improved results. •

Global Gross Premium

New India posted a total Global premium of Rs.4812.79 Crs (US $1.01 billion) achieving a growth rate of 14.64%

•

Domestic

Indian Direct Premium of Rs.3921.24 Crs as against Rs.3512.33 Crs registering an accretion ol 11.64%. In absolute term Rs.408.91 Crs were added •

Foreign

Outside India a premium of Rs.891.55 Crs was booked in the year 2002-03 as against Rs.685.73 Crs clocking a growth of 30.01% •

Incurred Claims

Ratio of incurred claims to net premium dropped from 83 28% ( Rs 2555.14 Crs.) to 76.77% (Rs.2699.51 Crs ) •

Operating Expenses

Operating expenses have shown a marginal increase of 0.76% i.e. from 24.69% to 25.45% of the net premium. Quantum increase is of Rs.137 Crs. This includes provision of Rs.43 Crs towards leave encashment and Rs.73 Crs for doubtful debts. Acquisition costs have accounted for Rs. 193 Crs as against Rs.80 Crs of previous year due la sleep increase of commission payment. Commission percentage to net premium increase to 5.49% from 2.60%. The increase in commission outgo due to revision in commission rate and introduction of new categories of intermediaries in the market. •

Management expenses

Company continues to be within section 40C limits. Against allowable expenses of Rs.767 Crs (19.56% of GDP) the actual expenses are Rs.727 Crs. (18.53% of GDP)

•

Solvency margin

Solvency Margin of the Company is 3.35 times of required margin. (Against RSM of Rs.906 Crs. As ASM is Rs.3126 Crs) •

Net financial result

Net underwriting loss after credit of investment income (Less provision) apportioned to policyholders has come down from Rs.88 Crs to Rs.24 Crs. The main reason being decrease In Incurred claims in Motor Dept from 119% to 85%. Net Investment income of Rs.762 Crs. (includes Rs.466.17 Crs. apportioned to policyholders and Rs.295.97 Crs to shareholders) could oil set the underwriting deficit. Net Profit alter tax has shown an increase of 80% i.e. from Rs.142 Crs to Rs. 255.81 Crs. Net worth per share appreciated to Rs.340.40 from Rs.318.94.

Tatal technical reserve (unexpired risk reserved plus provision of outstanding claims duly Valued by appointed actuaries as stipulated by IRDA) stands at Rs.5737.51 crs , an increase of Rs.763.97crs over Rs. 5023.57.

Chart title

Access to specialists in areas such as tax

Planning. Meaning assets in retirement Planning to achieve specific financial goals Portfolio review &investment recommendation

Dividend Rs. 40 crs(40%) has been declared as dividend which is highest quantum paid. Financial rating Company is rated as ‘A’ (exallent) by A.M.best & co. for the fourth year in succession.

Plans for 2003-04 domesticFor the year 2003-04 we have planned for a large! of Rs.4100 Crs. Foreign The premium objective for 2003-04 is aimed al Rs.936 Crs gross.

Information Technology New India is all set to embark on the implementation of GENISYS ENTERPRISE- the customized enterprise solution being procured from

CMC. GENISYS ENTERPRISE is an umbrella application that will address to enterprise wide requirements of the Company Wide Area Network connecting all our Regional Offices (except Nagpur) with Head Office through leased lines is already in place. Currently being used for voice transfer and data transfer. Today, the database across the organization is a distributed one. With GENISYS ENTERPRISE, the data from operating offices will be replicated at a repository at Regional Office and through WAN connectivity, at the Central repository at the Head Office. GENISYS ENTERPRISE WILL ENABLE Operating Office data exchanges, data integration with lateral and higher office and enterprise wide data consolidation. It will enable business intelligence and multi-dimensional analysis of data.