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PART-I 1
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PART-I
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EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
Overall, the life insurance and pension sector is set for rapid changes and growth in
the years ahead. Delivering service, building trust and being innovative are key areas
in which any company will have to excel in order to do well in the long road ahead.
Different companies will take different approaches and it would be myriad of
solutions that will be found to delight the Indian customer.
During the first part, I was given complete classroom training about the various unit
linked as well as the traditional plans and solutions which the company offers.
Later, Market Research was done through various activities and tele-calling which are
discussed further in the report. Activities led to practical exposure and taught me the
aspects of customer dealing.
Finally, interesting conclusions were drawn out of the data collected regarding the
Awareness of Financial Planning among the people in today’s environment.
It was great experience because selling an insurance product demands a great deal of
confidence and product knowledge.
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INDUSTRY PROFILE
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INDUSTRY PROFILE
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.
The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire
and flood and loss of life and were willing to make some sort of sacrifice in order to
achieve security. Though the concept of insurance is largely a development of the
recent past, particularly after the industrial era – past few centuries – yet its
beginnings date back almost 6000 years.
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. All the insurance companies established during
that period were brought up with the purpose of looking after the needs of European
community and these companies were not insuring Indian natives.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal rates.
Bharat Insurance Company (1896) was also one of such companies inspired
by nationalism. The Swadeshi movement of 1905-1907 gave rise to more
insurance companies.
The United India in Madras, National Indian and National Insurance in
Calcutta and the Co-operative Assurance at Lahore were established in 1906.
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In 1907, Hindustan Co-operative Insurance Company took its birth in one of
the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in
Calcutta.
The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay
Life) were some of the companies established during the same period.
The Parliament of India passed the Life Insurance Corporation Act on the 19th of
June 1956, and the Life Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more widely and in
particular to the rural areas with a view to reach all insurable persons in the country,
providing them adequate financial cover at a reasonable cost.
Some of the important milestones in the life insurance business in India are:
1850: Non life insurance debuts with triton insurance company.
1870: Bombay mutual life assurance society is the first Indian owned life insurer.
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
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Act, 1956, with a capital contribution of Rs. 5 Crore from the Government of India.
Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI
Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and
recommend its future direction.
The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector.
The reforms were aimed at “creating a more efficient and competitive financial
system suitable for the requirements of the economy keeping in mind the structural
changes currently underway and recognizing that insurance is an important part of the
overall financial system where it was necessary to address the need for similar
reforms…”.
The Insurance Regulatory and Development Authority (IRDA)
The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to
act as a strong and powerful supervisory and regulatory authority for insurance. Post
nationalization, the role of Controller of Insurance diminished considerably in
significance since the Government owned the insurance companies.
But the scenario changed with the private and foreign companies foraying in to the
insurance sector. This necessitated the need for a strong, independent and autonomous
Insurance Regulatory Authority was felt. As the enacting of legislation would have
taken time, the then Government constituted through a Government resolution an
Interim Insurance Regulatory Authority pending the enactment of a comprehensive
legislation.
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The Insurance Regulatory and Development Authority Act, 1999 is an act to provide
for the establishment of an Authority to protect the interests of holders of insurance
policies, to regulate, promote and ensure orderly growth of the insurance industry and
for matters connected therewith or incidental thereto and further to amend the
Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General
insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life
Insurance Corporation of India (for life insurance business) and General Insurance
Corporation and its subsidiaries (for general insurance business).
Insurance Sector Reforms
Prior to liberalization of Insurance industry, Life insurance was monopoly of LIC.
In 1993, Malhotra Committee- headed by former Finance Secretary and RBI
Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and
recommend its future direction. The Malhotra committee was set up with the
objective of complementing the reforms initiated in the financial sector. The reforms
were aimed at creating a more efficient and competitive financial system suitable for
the requirements of the economy keeping in mind the structural changes currently
underway and recognizing that insurance is an important part of the overall financial
system where it was necessary to address the need for similar reforms. In 1994, the
committee submitted the report and some of the key recommendations included:
Structure
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.
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Competition
Private Companies with a minimum paid up capital of Rs.1 billion should be allowed
to enter the sector. No Company should deal in both Life and General Insurance
through a single entity. Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.
Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be set
up. Controller of Insurance- a part of the Finance Ministry- should be made
independent
Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from
75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company
(there current holdings to be brought down to this level over a period of time)
STATISTICS (INDIAN & GLOBAL)
This section gives the users important and detailed statistics of the Indian as well as
the Global insurance industry. These statistics would give important insights of where
the respective markets are headed for.
The global life insurance market stands at $1,521.2 billion while the non-life
insurance market is placed at $922.4 billion.
The United States itself accounts for about one-third of the $2443.6 billion
global insurance market and Japan stands next with a 20.62% share.
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India takes the 23rd position with US $9.933 billion annual premium
collections and a meager 0.41% share.
Out of one billion people in India, only 35 million people are covered by
insurance.
India's life insurance premium as a percentage of GDP is just 1.77 per cent.
The income derived by GIC and its subsidiary companies through investment
was Rs.2491.76 crore and the investable fund generated was Rs.2843 crore in
1999-2000.
Indian insurance market is set to touch $25 billion by 2010, on the assumption
of a 7 per cent real annual growth in GDP.
NATURE OF INDUSTRY
The insurance industry provides protection against financial losses resulting from a
variety of perils. By purchasing insurance policies, individuals and businesses can
receive reimbursement for losses due to car accidents, theft of property, and fire and
storm damage; medical expenses; and loss of income due to disability or death.
The insurance industry consists mainly of insurance carriers (or insurers) and
insurance agencies and brokerages. In general, insurance carriers are large companies
that provide insurance and assume the risks covered by the policy. Insurance agencies
and brokerages sell insurance policies for the carriers.
Insurance companies assume the risk associated with annuities and insurance policies
and assign premiums to be paid for the policies. In the policy, the companies states
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the length and conditions of the agreement, exactly which losses it will provide
compensation for, and how much will be awarded.
The premium charged for the policy is based primarily on the amount to be awarded
in case of loss, as well as the likelihood that the insurance carrier will actually have to
pay. In order to be able to compensate policyholders for their losses, insurance
companies invest the money they receive in premiums, building up a portfolio of
financial assets and income-producing real estate which can then be used to pay off
any future claims that may be brought.
There are two basic types of insurance carriers: Direct and Reinsurance.
Direct carriers are responsible for the initial underwriting of insurance policies and
annuities, while Reinsurance carriers assume all or part of the risk associated with the
existing insurance policies originally underwritten by other insurance carriers.
Direct insurance carriers offer a variety of insurance policies.
Life insurance provides financial protection to beneficiaries—usually spouses and
dependent children—upon the death of the insured.
Disability insurance supplies a preset income to an insured person who is unable to
work due to injury or illness
Health insurance pays the expenses resulting from accidents and illness.
An Annuity (a contract or a group of contracts that furnishes a periodic income at
regular intervals for a specified period) provides a steady income during retirement
for the remainder of one’s life.
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Property-casualty insurance protects against loss or damage to property resulting from
hazards such as fire, theft, and natural disasters.
Liability insurance shields policyholders from financial responsibility for injuries to
others or for damage to other people’s property. Most policies, such as automobile
and homeowner’s insurance, combine both property-casualty and liability coverage.
Companies that underwrite this kind of insurance are called property-casualty carriers.
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What is Life Insurance?
Human life is subject to risks of death and disability due to natural and accidental
causes. When human life is lost or a person is disabled permanently or temporarily,
there is a loss of income to the household. The family is put to hardship. Risks are
unpredictable. Death/disability may occur when one least expects it. There are a
number of life insurance products which offer protection and also coupled with
savings.
A Term insurance product provides a fixed amount of money on death during the
period of contract.
A Whole Life insurance product provides a fixed amount of money on death.
An Endowment Assurance product provided a fixed amount of money either on death
during the period of contract or at the expiry of contract if life assured is alive.
A Money Back Assurance product provides not only fixed amounts which are payable
on specified dates during the period of contract, but also the full amount of money
assured on death during the period of contract.
An Annuity product provides a series of monthly payments on stipulated dates
provided that the life assured is alive on the stipulated dates.
A Linked product provides not only a fixed amount of money on death but also sums
of money which are linked with the underlying value of assets on the desired dates.
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There are a variety of life insurance products to suit to the needs of various categories
of people—children, youth, women, middle-aged persons, old people; and also rural
people, film actors and unorganized laborers.
Life insurance products could be purchased from registered life insurers notified by
the IRDA. Insurers appoint insurance agents to sell their products.
As per regulations, insurers have to give the various features of the products at the
point of sale. The insured should also go through the various terms and conditions of
the products and understand what they have bought and met their insurance needs.
They ought to understand the claim procedures so that they know what to do in the
event of a loss.
INDIAN INSURANCE SECTOR
REGULATORY BODY
Insurance is a federal subject in India. The primary legislation that deals with
insurance business in India is: Insurance Act, 1938, and Insurance Regulatory &
Development Authority Act, 1999.
The Insurance Regulatory and Development
Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body
in April 2000 has fastidiously stuck to its schedule of framing regulations and
registering the private sector insurance companies.
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The other decision taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of the
IrDA’s online service for issue and renewal of licenses to agents. Since being set up
as an independent statutory body the IRDA has put in a framework of globally
compatible regulations.
MISSION-IRDA
“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.”
IMPACT OF LIBERALISATION
The introduction of private players in the industry has added to the colors in the dull
industry. The initiatives taken by the private players are very competitive and have
given immense competition to the on time monopoly of the market LIC. Since the
advent of the private players in the market the industry has seen new and innovative
steps taken by the players in this sector.
The new players have improved the service quality of the insurance. As a result LIC
down the years have seen the declining phase in its career. The market share was
distributed among the private players. Though LIC still holds the 79% of the
insurance sector but the upcoming natures of these private players are enough to give
more competition to LIC in the near future. LIC market share has decreased from
95% (2002-03) to 81 %( 2004-05).
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LIC has the current market share of 79%.
Among the private players MAXhas the maximum of appx. 5.60%
Bharti Axa has the current market share of 5%.
Followed by Bajaj Allianz (3.27 %) and HDFC Standard Life of about 3.11%.
Below is the table that shows the market share of various players of the industry.
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The following companies have the rest of the market share of the insurance industry.
COMPANY NAME MARKET SHARE
LIC 79.30
ICICI PRUDENTIAL
BHARTI AXA
5.63
5
BAJAJ ALLIANZ 3.27
HDFC STANDARD LIFE 3.11
BIRLA SUNLIFE 2.32
TATA AIG 1.45
SBI LIFE 1.24
MAX NEWYORK 0.90
AVIVA LIFE 0.82
ING VYSYA 0.66
OM KOTAK LIFE 0.54
AMP SANMAR 0.38
METLIFE 0.33
RELIANCE LIFE 0.05
The liberalization of the Indian insurance sector has opened new doors to private
competition and the new and improved insurance sector today promises several new
job opportunities. With private players now in the field, there will be innovative
products, better packaging, improved customer service, and, most importantly, greater
employment opportunities.
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There are a number of options to choose from for a career in Insurance. Ideally an
insurance company will have openings in the following fields:
Actuaries
Underwriter
Surveyor
Investment
Marketing & Distribution
Actuaries
Evaluates the risk for companies to be used for strategic management
decisions.
Actuaries use their analytical skills to predict the risk of writing insurance
policies through the use of mathematical, statistical and economic models.
An actuary not only fixes the premium rates for new products, but also revises
both products and prices. They calculate costs to assume risk
Underwriters
Insurance underwriters review insurance applications and decide whether they
should be accepted or rejected based on the degree of risks involved in
insuring the people or objects of concern.
In the life insurance business, an underwriter is expected to filter the "bad or
substandard lives". Whereas, in the general insurance segment, he takes care
of risk management.
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CURRENT SCENARIO OF THE INDUSTRY
INSURANCE MARKET IN INDIA
India with about 200 million middle class household shows a huge untapped potential
for players in the insurance industry. Saturation of markets in many developed
economies has made the Indian market even more attractive for global insurance
majors. The insurance sector in India has come to a position of very high potential and
competitiveness in the market.
Innovative products and aggressive distribution have become the say of the day.
Indians, have always seen life insurance as a tax saving device, are now suddenly
turning to the private sector that are providing them new products and variety for their
choice. Life insurance industry is waiting for a big growth as many Indian and foreign
companies are waiting in the line for the green signal to start their operations. The
Indian consumer should be ready now because the market is going to give them an
array of products, different in price, features and benefits. How the customer is going
to make his choice will determine the future of the industry.
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DISTRIBUTION CHANNELS
LIC has already well established and have an extensive distribution channel and
presence. New players may find it expensive and time consuming to bring up a
distribution network to such standards. Therefore they are looking to the diverse areas
of distribution channel to have an advantage. At present the distribution channels that
are available in the market are:
• Direct selling/Retail
• Corporate agents
• Group selling
• Brokers and cooperative societies
• Bancassurance
An agent should be a pleasing personality with complete knowledge about the various
plans and solutions which the company has to offer and must also understand the
customer’s psychology well to deal in an efficient manner.
BANCASSURANCE
Bancassurance is the distribution of insurance products through the bank's distribution
channel. It is a phenomenon wherein insurance products are offered through the
distribution channels of the banking services along with a complete range of banking
and investment products and services. To put it simply, Bancassurance, tries to exploit
synergies between both the insurance companies and banks.
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Advantages to banks
Productivity of the employees increases.
By providing customers with both the services under one roof, they
can Improve overall customer satisfaction resulting in higher customer retention
Levels.
Increase in return on assets by building fee income through the sale of
Insurance products.
Can leverage on face-to-face contacts and awareness about the
financial Conditions of customers to sell insurance products.
Banks can cross sell insurance products e.g.: Term insurance products with loans.
Advantages to insurers
Insurers can exploit the banks' wide network of branches for distribution of
products. The penetration of banks' branches into the rural areas can be
utilized to sell products in those areas.
Customer database like customers' financial standing, spending habits,
investment and purchase capability can be used to customize products and sell
accordingly.
Since banks have already established relationship with customers, conversion
ratio of leads to sales is likely to be high. Further service aspect can also be
tackled easily.
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Advantages to consumers
Comprehensive financial advisory services under one roof. i.e., insurance
services along with other financial services such as banking, mutual funds,
personal loans etc.
Enhanced convenience on the part of the insured
Easy accesses for claims, as banks are a regular go.
Innovative and better product ranges
WHAT DOES LIFE INSURANCE HAVE TO OFFER?
Life insurance is many different things to many different people. For some, it is a
premium to be paid on time. For others it offers liquidity since cash can be borrowed
when needed. For the investment-minded, it denotes a constantly growing capital
account and numerous other benefits.
The contractual guarantee is the promise to pay, backed by one of the oldest and most
stably regulated financial industry operating in the Indian sub-continent today.
1) Insurance Buys Time and Money
People like to refer to life insurance as time insurance, the reason being that life
insurance proceeds are paid to the insured's beneficiaries in case of death. The money
proffered by life insurance helps buy time to adjust to the change of circumstances.
Insurance provides large amounts of cash that will keep the lifestyle for the survivors
the way it was before the insured's death.
2) Insurance Offers Peace of Mind
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For the person who buys an insurance policy, it offers absolute and complete peace of
mind. He or she knows that the decision made by him will provide sound benefits in
the future, whether or not the individual may live to see it.
3) Multiple Applications
The future is uncertain for each and every one. No one knows how long he or she will
live. The investment benefit is paid to the insured's beneficiaries after his death or it
can be used during the life as well. Life insurance policy owners can turn to the cash
value of the policy in case of a financial emergency when all avenues are either
blocked or denied.
4) Enduring Elasticity
Since life insurance is flexible enough to serve several needs, the insured can keep
several long-term goals in mind once he or she invests in the insurance plan. The cash
value of the policy can be allocated towards augmenting the monthly income during
the retirement years. Leisure years should be turned into pleasure years. Permanent
life insurance is designed on the concepts of long-term flexibility.
5) Financial Security
The insurance policy offers contractual guarantees to people looking for peace of
mind when they buy life insurance. Life insurance offers complete financial security.
The purchase of life insurance demonstrates concern for a family's future financial
well being.
6) Regard for Family
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The purchase of life insurance clearly displays care and concern for the people the
policy owner loves.
7) Insurance is Safer
No financial institution can do what life insurance does. No industry can back its
products with reserves and surplus as sound as those of the insurance industry.
The proof of strength and safety that insurance companies have ensured even under
the most adverse of conditions is a matter of pride for the entire insurance industry.
For generation after generation, life insurance has been acclaimed as the very
benchmark of security against which the other industries are measured.
OPPORTUNITIES FOR INSURANCE COMPANIES
In the now open sector on insurance, the following is what I feel will determine the
success of the company in particular and the industry in general:
A change in the attitude of the population
Indians have always been wary of employing their hard-earned money in a venture
that will pay them on their death. Insurance has always been used as a Tax saving
tool. No more, no less. It is upon the insurers to educate the people to secure/insure
their future against any unknown calamity and make a shield around their families
and businesses.
An open and transparent environment created under the IRDA.
The reason for this being on the top of our understanding is that when ever we have
seen any sector open up in India there are always grey areas and unsure policies.
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These are not exactly what any player, be it Indian or foreign, looks for. It creates an
air of uncertainty in all the decision making process. Insurance as a sector requires
players who are strong financially and are willing to wait for returns. Their confidence
can be bolstered only if there is an open and a transparent policy guidelines. This will
also help the consumers feel safe that the regulatory is an active one and cares to do
everything possible to keep things under control and help the insurance environment
grow maturely.
A well-established distribution network.
To cater to the largest democracy in the world is by no means a cakewalk. Insurance
profits are directly related to number of insured and this is in turn related to the reach.
Trained professionals to build and sell the product.
It is said that the insurance agent is the best salesman in the world. He makes you pay,
regularly, an amount promising to pay back only on your death. Thus the players will
require an excellent sales team to sell their products in the now competitive
environment.
Encouragement of new and better products and letting the hackneyed ones die out.
This will itself ensure the market grows. And that every class/society gets a product
that best suits them.
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SPECIAL PROVISIONS
The Income Tax Act and Life Insurance policies
Under Section 10(10D), any sum received under a Life Insurance policy (not
being a Key Man policy) is also exempt from taxation. But it is wise to remember
that Pensions received from Annuity plans are not exempted from Income Tax.
Section 80C provides a deduction up to Rs.1,00,000/- to an individual assesses
for any amount paid as a premium.
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INTRODUCTION TO INSURANCE COMPANY.
In order to go through the journey of LIC – Path of private sector
insurance companies to nationalize company to again private sector
insurance companies is given as below:
Path
Private Life Insurance Companies
Nationalization
Privatization of Life Insurance Sector
1870 –
1956
Life Insurance concept was
accepted with almost 250 Private
Life Insurance Companies
1956
Merging of almost 250 Private
Sector Life Insurance Companies
in one nationalized
Life Insurance Corporation of
India
1995Proposal to privatize life
insurance business
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June
2000Registration process was notified
August
2000Application was filed
Octobe
r 2000
1st license was issued with
introduction of IRDA
2002
During the month of January, 11
Life and Non-Life Private
Insurance license were issued
In order to elaborate the above path lets go through the history of Life
Insurance Sector.
On 3rd December 1670, seven earnest men of Bombay with just seven rupees
for initial expenses gave shape to a plan of offering insurance to the public
without the risk of ruin and the Bombay Mutual Life Insurance Society came
into existence.
Right up to the end of the 19th century, foreign insurance companies had an
upper hand in the matter of insurance business and they enjoyed mere
monopoly and the partiality were observed in the form that Indian lives were
insured with 10% extra premium as a common practice, at that time Lala
Harikishan Lal from Lahore was called “The Napoleon of Indian Finance” as
he was then called to launch the Bharat Insurance Company at Lahore (1896)
in Punjab.
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Prior to 1912, India had no legislation for regulating insurance. The Life
Insurance Companies Act 1912 and the Provident Fund Act 1912 were
passed.
The Insurance Act 1938 was the first comprehensive legislation governing not
only life but also non-life branches of insurance to provide strict state control
over insurance business.
But after the introduction of Insurance Act 1938, the demand for
nationalization of Life Insurance Industry was raised, there were so many
reasons in order to nationalize the insurance sector.
They are:
Policyholders will be provided cent percent security.
Expenses will be reduced due to Absence of duplication,
wasteful competition
Better service due to absence of profit motive.
The funds will be available for nation building activities.
Insurance is servicing sector and so that it should be in the
hands of government only.
Above are few but strong reasons, which have contributed towards
nationalization of insurance sector, and then after in the year 1956, all
insurance companies were merged in to one and Life Insurance Corporation of
India came into existence.
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Till the year 1999, LIC of India was the only insurance sector in economic
market with ever-increasing growth rate and market share with the capacity to
earn high rate of profit and thus profitability. In spite of all these merits of
LIC, the overall status of insurance sector was not so satisfactory.
Business figure before the introduction of IRDA
Population 1.00 Billion
Insurable Population 0.36 Billion
No. Of insured individuals 0.08 Billion
Potential uninsured
individuals
0.28 Billion
New Business premium 0.66 Billion
Above stated figures clearly shows that from 1 Billion population of India,
almost 0.28 Billion population was uninsured. Again the existing government
unit did not properly meet the emerging segments like retirement, disability.
Moreover, the government wanted 25% p.a. growth rate in new business
premium from insurance sector. All these factors combine forced the
government to take the decision about the privatization of insurance sector.
In order to increase the business activities, the introduction of IRDA was
made by Government. Thus, IRDA (Insurance Regulatory and Development
Authority) witnessed the existence power to co-ordinate regular and control
the insurance business.
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Private Insurers in Indian Insurance Market
Registration No.
Date of Registration
Name of the Company
101 23.10.2000 HDFC Standard Life
104 15.11.2000 Max New York Life
105 24.11.2000 MAXLife
107 10.01.2001 Om Kotak Mahindra Life
109 31.01.2001 Birla Sun Life Insurance
110 12.02.2001 TATA AIG Life Insurance
111 30.03.2001 SBI Life Insurance
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COMPANY PROFILE
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COMPANY PROFILE
Max New York Life Insurance
“Max New York Life wants people to view insurance as a financial protection and
wealth creation instrument and not just a tax-saving tool.”
Max New York Life Insurance Company Ltd. is a joint venture between New
York Life, a Fortune 100 company and Max India Limited, one of India's leading
multi-business corporations. The company has positioned itself on the quality
platform. In line with its vision to be the most admired life insurance company in
India, it has developed a strong corporate governance model based on the core values
of excellence, honesty, knowledge, caring, integrity and teamwork. The strategy is to
establish itself as a trusted life insurance specialist through a quality approach to
business.
New York Life is a Fortune 100 company that has over 160 years of experience in the
life insurance business. Max India Limited is a multi-business corporate dealing in
Clinical Research, IT and Telecom Services, and Specialty Plastic Products
businesses.
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Max New York Life Insurance started its operations in India in 2000. It is the first life
insurance company in India to be awarded the IS0 9001:2000 certification. Max New
York offers customized products tailored to suit individual's needs. With its various
Products and Riders, there are more than 400 product combinations to choose from.
Today, Max New York Life Insurance has a network of 57 offices spread over 37
cities all over India.
In line with its values of financial responsibility, Max New York Life has
adopted prudent financial practices to ensure safety of policyholder's funds. The
Company's paid up capital is Rs. 657 crore, which is more than the norm laid down by
IRDA.
Max New York Life has identified individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which
comprises four stages - screening, psychometric test, career seminar and final
interview. The agent advisors are trained in-house to ensure optimal control on
quality of training.
Max New York Life invests significantly in its training program and each
agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the
IRDA before beginning to sell in the marketplace. Training is a continuous process
for agents at Max New York Life and ensures development of skills and knowledge
through a structured program spread over 500 hours in two years. This focus on
continuous quality training has resulted in the company having amongst the highest
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agent pass rate in IRDA examinations and the agents have the highest productivity
among private life insurers.
It has established a wide agency distribution network with 172 offices and
representatives across 120 cities in India. The company has established additional
channel with 22 bancassurance relationships, corporate tie-ups and a strong Direct
Sales Team. Through its wide network of highly competent life insurance agent
advisors, flexible product solutions and strong customer focus, Max New York life is
creating a partnership for life with its customers in India.
Max New York Life, one of India’s leading life insurance companies,
expanded its presence in the southern region by opening its first general office in the
city of Mysore. Max New York Life now has established a countrywide network of
172 offices and representatives across 120 cities in India.
Max New York Life, which has till date sold over 1.53 million policies and
recorded a sum assured of over Rs. 46,000 crore, has positioned itself on the quality
platform. The company has developed a strong corporate governance model based on
defined core values of caring, knowledge, excellence and honesty. Its strategy is to
establish itself as a trusted life insurance specialist on the bedrock of quality of
advice. The company has over 25,300 agent advisors, who are widely considered the
best in the business.
Max New York Life aspires to be the "life insurance brand of first choice"
amongst Indian consumers. To achieve this the company will draw on New York
35
Life's demonstrated competence in developing and managing a superior personal sales
network. For the last 46 years consecutively, the largest number of agents qualifying
for membership to the Million Dollar Round Table (MDRT) have been from New
York Life. The MDRT is the industry's most prestigious organization comprising the
world's most successful insurance agents. Max New York Life, a merit oriented and
equal opportunities employer, is looking for a few good men and women who will
spearhead the effort to realize this vision.
“Max New York Life wants people to view insurance as a financial protection
and wealth creation instrument and not just a tax-saving tool. Since the launch of our
operations, our focus has always been on providing risk protection and long-term
wealth creation solutions to our customers. With a diverse product portfolio to meet
customer requirements, it is evident that we are setting benchmarks in the marketplace
and are well on course of realizing our vision to become India’s most admired Life
Insurance Company.”
“An ever expanding presence of Max New York Life offices across India
reinforces our commitment to serving the nation. We are extremely pleased with our
progress in the region and feel that opening an office in Mysore would help us
educate people about the true potential and benefits of life insurance. As life insurance
specialists, Max New York Life will continue to help consumers make the right
choices to meet their financial goals, both for the short and long-term, through sound
quality advice offered by our agent advisors and a right mix of product offerings.” he
added.
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Max New York Life has been instrumental in changing the paradigm of life
insurance in India. It is the first life insurance company in India to introduce cause
related marketing.
Children are at the very heart of Max New York Life's strategy. SOS
Children's Villages of India is internationally recognized for its work in giving
underprivileged children a wholesome life. The mission of SOS is "to help orphaned
and abandoned children, by providing them with a family, a permanent home,
education and strong foundation for an independent life." It's mission ties in with Max
New York Life's philosophy of helping people secure the future of their near and dear
ones.
Vision:
Vision statement is "Most Admired Life Insurance Company in India".
Mission:
Become one of the top quartile life insurance companies in India
Be a national player
Be the brand of first choice
Be the employer of choice
Become principal of choice for agents
37
Max New York Life Values and Beliefs
Excellence
"In every aspect of work. Ranging from the in-house training institute to the detailed
Personal Insurance Plan. Max New York Life is focused on achieving the highest
standards of quality in every aspect of their business".
Honesty
"Is the heart of the Life Insurance business. Max New York believes that above all,
Life Insurance is based on trust. Transparency, Dependability and Integrity will form
the cornerstones of the Max New York Life experience."
Knowledge
"Is what makes experts. Max New York Life is focused on the Life Insurance
business. Perfectly combining global expertise with local knowledge, Max New York
Life is the Indian Life Insurance specialist."
Caring
"For the customer. Max New York Life is redefining the Life Insurance paradigm to
focus on the needs of the customers. The Max New York service process is
responsive, personalized, humane and empathetic."
Culture:
Our "in house culture recipe" has some of the finest ingredients going into its making.
Some of the more prominent aspects of our culture are stated below:
38
Customer comes first
Do it right the first time
Bias for result oriented action
Financial strength and discipline
Clarity of purpose
International quality standards
Inclusive Meritocracy
Learning opportunities
Fun at work
Commitment to published value system
39
MANAGEMENT
BOARD OF DIRECTORS:
MANAGEMENT TEAM:
40
Analjit SinghChairman, Max India Limited
Gary R. BennettManaging Director and CEO,Max New York Life Insurance
Anuroop 'Tony' Singh Vice Chairman,Max New York Life Insurance
Ted MathasPresident & Chief Operating Officer,New York Life Insurance
Gary Bennett Managing Director and CEO, Max New York Life
Sunil Sharma Chief Operating Officer and Executive Director
Rajit Mehta Executive Director, Human Resources, Training and Internal Communications
Rajesh Sud Executive Director, Distribution
Anil Mehta Director, Group Business
Sunil Kakar Director and Chief Financial Officer
Ajay Seth Director, Legal & Compliance
Debashis Sarkar Director - Marketing, Product Management and Corporate Affairs
John Poole Chief Actuary
PRODUCTS & SERVICES
41
PRODUCTS & SERVICES
Protection Plans:
Five Year Renewable and Convertible Term Insurance
Max New York Life's Five Year Renewable and Convertible Term Insurance (Non-
Participating) plan not only provide you with a low cost insurance cover during its
tenure of five years, it also helps you plan in advance for various future needs and
your family's financial security, should anything unfortunate happen to you. Offering
a guaranteed Death Benefit, this plan is particularly useful as a short-term protection
plan. An important feature of this policy is that it allows the insured to convert the
policy to a regular policy during the tenure of the policy.
Level Term (Non Participating) Policy
Max New York Life's Level Term (Non Participating) Policy is a plan that covers
your life at a very low cost and reduces the consequent hardship your family may
have to bear in the unfortunate event of your death. Incase of the unfortunate death of
the policy holder during the term of the plan, an amount equal to the sum assured is
paid to the nominee.
Children Plans:
Children's Endowment to 18 (Par) Plan
Max New York Life presents Children's Endowment Participating Insurance to age 18
with an option to buy a permanent life insurance policy without medical underwriting
(irrespective of his/her health at that time). This policy which is especially designed to
enable you to provide for higher education of your child and take care of your child’s
future needs in case of spiraling costs.
42
Bonus: From 3rd policy year, we will declare bonuses every year
Children's Endowment to 24 (Par) Plan
Max New York Life’s Children's Endowment Participating Insurance to age 24
provides an option to buy a permanent life insurance policy without medical
underwriting (irrespective of his/her health at that time). This policy enables you to
provide for various events in your child’s life such as a grand wedding of your
child. This excellent plan is a participating plan, which is also eligible for bonuses and
Max New York Life may declare these bonuses from time to time and from the third
policy year. An important feature of this plan is that the entire sum assured is paid out
on maturity and the plan automatically vests when the child turns 18.
Stepping Stones™ (Par) Plan
Max New York Life’s Stepping Stones™ is a smart way to plan your children’s
education and their future irrespective of whether you are there or not. It provides you
with regular money when it is required. This policy also builds cash value, which you
can use during your lifetime to fund any unforeseen needs by surrendering
accumulated PUAs. This policy also entitles you to make partial withdrawals for
various unplanned expenses in the future.
SMART Steps™ Plan
Introducing Max New York Life’s regular premium unit linked life insurance
children’s plan – SMART Steps™, which will help you plan for your child's future in
a SMART way and takes your worries away. This plan offers the required financial
43
protection for your loved ones if you are not alive and provides an unmatched
investment opportunity by way of well managed investment funds. This policy also
entitles you to make partial withdrawals for various unplanned expenses in the future.
Facility of partial withdrawals for those unplanned expenses
SMART Steps ™ Plus
A regular premium unit linked life insurance plan, Max New York Life’s SMART
Steps™ Plus will help you plan for your child's higher education, marriage, and
financial security. This plan offers no-compromise 360 degree protection to your
children even if you are not alive and provides an unmatched investment opportunity
by way of well managed investment funds. This policy also entitles you to make
partial withdrawals for various unplanned expenses in the future.
SMART Steps ™ Single Premium Plan
Max New York Life’s SMART Steps™ Single Premium policy will help you plan for
your child's future in a SMART and organized manner. Apart from offering 360
degree protection to your child if you are not alive, this plan also provides an
unmatched investment opportunity by way of well managed investment funds. This
policy also entitles you to make partial withdrawals for various unplanned expenses in
the future.
Investment Plans:
Life Maker™ Premium Investment Plan
44
The latest Life Maker™ Premium Investment Plan gives you a lot of choices -
especially when you are looking for Great life style, Big Home, your own well
established Business and top of all - Protection for your family. Our Unit linked Life
Insurance plan can be the financial cornerstone for your objectives. Max New York
Life Insurance provides you a powerful investment-cum-insurance plan where you
can direct your investments in the customized unit linked funds such as equities,
money market instruments, investment grade corporate bonds, and government
securities. These funds offer a wide range of returns basis market returns. You can
choose to invest your premiums in one or more of these funds, basis your risk taking
ability.
Bonus: From 3rd policy year, we will declare bonuses every year
Life Maker™ Platinum - a Unit Linked Investment Plan
With the Life Maker™ Platinum - a Unit Linked Investment Plan, you can meet
all your financial needs, without the tedium of managing multiple products. In this
plan, you can direct your investments in the customized unit linked funds such as
equities, money market instruments, investment grade corporate bonds, and
government securities. These funds offer a wide range of returns basis market returns.
You can also choose to invest your premiums in one or more of these funds, basis
your risk taking ability.
Life Maker™ Gold Plan
This plan enables you to choose an attractive investment fund, enjoy free loyalty units
and tax benefits on premiums and maturity value. Life Maker™ Gold Plan also
45
provides you insurance cover, in which, your nominee will get the Sum Assured plus
the Fund Value to your nominee(s), in case of unfortunate event of your death. Our
Plan also offers you the flexible investment feature, where you can choose one out of
four attractive funds options and also change your risk return profile of your existing
investments by switching across funds with our high customization feature.
Life Invest™ Plan
This policy will provides you comprehensive protection from 3 Ds i.e. Death, Disease
and Disability. Apart from loyalty units and tax benefits, the maturity feature of this
policy will also pay you the fund value. Flexible Investment with choice of four
attractive fund options, lump sum investment in your plans through top ups as per
your cash flow, increasing death benefits, flexibility to choose premium payment
terms are few of the benefits you can enjoy through this policy.
SMART Assure Plan
Our smart assure plan also enables you to make partial withdrawals at the time of
unexpected expenses. The switching feature of this policy provides you the facility to
change the investment pattern by moving from one fund to other fund(s) amongst the
funds offered under this contract
Retirement Plans:
Easy Life™ Retirement (Par) Plan
Catering to the diverse set of needs of various customers looking for retirement
planning, Max New York Life offers some splendid retirement plans, which would
suit their budget and lifestyle. Max New York Life's Easy Life™ Retirement Plan
46
Regular Premium/Single Premium (Participating) Policy is designed to help you save
money for your retirement. It also provides you with an opportunity to take home a
regular retirement income (i.e. pension).
SMART Invest™ Pension Plan
Offering competitive returns to secure the golden years of your life, Max New York
Life's SMART Invest™ Pension Plan is a comprehensive unit linked pension plan to
meet your post retirement financial needs, ensuring you complete peace of mind. One-
third of the corpus can be commuted at vesting age the amount commuted are eligible
for tax exemption u/s 10A.
Health Plans:
LifeLine-MediCash™ Plan
Max New York Life's Lifeline-MediCash™ health Insurance plan provides you
support by giving you hospital cash benefit, whenever you are hospitalized. Through
this plan you will get a fixed benefit towards hospitalization, ICU and recuperation
(post hospitalization).
LifeLine-MediCash™ Plus Plan
Presenting Lifeline - MediCash™ Plus health Insurance plans from MNYL that
provide you support by giving you hospital cash benefit, whenever you are
hospitalized. Through this plan you will get a fixed benefit towards hospitalization,
ICU and recuperation (post hospitalization). And the surgical expenses of a fixed
47
Lump-sum amount will be paid under LifeLine – MediCash™ Plus for more than 400
listed surgeries that you may undergo.
LifeLine-Wellness™ Plan
Max New York Life's LifeLine-Wellness™ is a health plan, which would provide you
360-degree benefit in terms of long tenure of coverage, coverage for 10 critical
illnesses, and permissible tax benefit under an Income Tax Act.
LifeLine-Wellness™ Plus Plan
Max New York Life's LifeLine-Wellness™ Plus health plan provides a wonderful
benefit system in terms of long tenure of coverage, coverage for 38 critical illnesses
and tax benefit.
LifeLine-Safety Net™ Plan
Recognizing the need for a complete all round financial protection for you and your
family, Max New York Life Insurance Company offers you a term cum health
insurance - LifeLine-Safety Net™ , the new age insurance covering death, disability,
disease and accident under one single plan.
SOME OF THE OTHER PLANS ARE:
SAVINGS PLANS:
W hole Life Participating
48
20 Year Endowment (Par)
Endowment to Age 60 (Par)
Life Gain Plus 20 (Par)
Life Gain Plus 25 (Par)
Life Pay Money Back
Life Gain Endowment
Life Partner
RURAL PLANS:
Max Suraksha
Easy Term Policy
STRATEGIC PRODUCTS PLANS:
Bancassurance
Super Saver Bond
Capital Builder
Additional Distribution
Max Mangal
Max Vriksha
Capital Builder
Max Amsure
Future Builder
49
Family Money Back
Bonus Builder
Business Builder
Secure Returns builders
PART-II
50
INTRODUCTION OF TOPIC
51
INTRODUCTION OF TOPIC
In the last few years, the market has undergone some fundamental changes in terms of
technologies, sources of recruitment, competition in the market etc. In an already
saturated market, where the practices like poaching and raiding are gaining
momentum, Sales professionals are constantly facing new challenges in one of their
most important function- Selling. They have to face and conquer various challenges to
find the best candidates for their organizations which can meet there targets.
The project focuses on the challenges facing the Sales department in the growing
insurance industry in India. Problems caused by the lack of skilled personnel and the
increasing demand for skilled employees are also discussed in the project.
In addition, challenges regarding the recruitment, training and development of
employees are examined. The project throws light on various measures taken by Sales
department in insurance organizations to improve the environment and the
productivity of employees.
52
RESEARCH METHODOLOGY
53
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may
be understood as a science of studying how research is done. We can say that research
methodology has many dimensions and research methods do constitute a part of the
research methodology. The study of research methodology gives the student the
necessary training in gathering material and arranging or car-indexing them,
participation in field work when required, and also training in techniques for the
collection of data appropriate to particular problem, in the use of statistics,
questionnaires and controlled experimentation and in recording evidences, sorting it
out and interpreting it. Knowledge of research methodology plays a key role in project
work. It consists of series of actions or steps necessary to effectively carry out
research and the desired sequencing of these steps.
Data Collection Method
Data can be collected by Primary as well as secondary method.
1) Primary Data Sources
Questionnaire methods and discussions with the HR and the employees were used to
collect data.
Questionnaire Designed: Questionnaire was used for the survey.
2) Secondary Data Sources
The secondary data sources were collected from the company manuals, handbooks,
and management books and are edited to suite the purpose.
Investment in Life Insurance is not a one-time activity. It is a continuous activity. The
same investor, if satisfied, will come to the fund again and again. When the investor
sends his application, it is not only an application, but it also contains vital
54
information. Most of this information if tabulated and analyzed, would provide
important insights into investor needs, preferences and behavior and enables us to
target customers need more accurately, to achieve better penetration, deeper loyalty
and reduced costs. It is in this context that direct marketing will assume increased
importance. Knowing the customer thoroughly is of utmost importance. Unlike the
consumer goods industry, it is not possible for Life Insurance industry to test market
and have pilot projects before launch. At the same time, focusing and concentrating
on a particular geographic area where the fund has a strong presence and proven
marketing network, can help reduce network, can help reduce issue expenses and
ultimately translate into higher returns for the investor. Very little research on investor
preference is available, but the industry can collectively have a data bank, and share
the information for appropriate use.
This study on Life Insurances in India has been based on primary as well as secondary
data sources.
The primary data is collected by the getting the questionnaire filled from the common
investor above the age of 25.
For this research, I have made use of a questionnaire for ascertaining the investment
pattern of a common investor.
The questionnaire consisted of 13 questions in total, each question having various
multiple choices. Depending upon the choice selected by the respondent, each
respondent gets a total score which represents his degree of favorability towards the
kind of investment he makes and his knowledge about the investments.
The main aim of conducting the survey using a questionnaire was to
55
understand the perception of small investors, who are the most exploited in Indian
capital Market, analyze the type of funds available for the investor, understand the
investment pattern of a common investor, importance of marketing Strategies in Life
Insurances.
This was done by ascertaining the average response of all the samples for the total 13
questions asked in the questionnaire. The results for the 13 questions asked were
further graphically represented, showing the favorability towards different parameters.
The secondary resources used in the study are:
• Books
• Journals
• Magazine Articles
• Internet Websites.
RESEARCH DESIGN
Exploratory type of research designs adopted because sources of information are
relatively few and the purpose is merely to find and to understand the possible
actions. The major purposes of exploratory study are:
Identification of problem
The precise formulation of problems including the identification of variables
Formulation of alternative course of action
An exploratory research is often the first in the series of projects that culminates in
one concerned with the drawing of inferences that are used as a basis of monetary
56
action. Exploratory study is often used as a introductory phase of a larger study and
results are used in developing specific technique for larger study. Of the study the
relevant questionnaire was prepared and circulated among a stratified sample of 50
employees of MAX LIFE INSURANCE Limited. This questionnaire formed the basis
for the views on each of the points raised in the questionnaire. The data thus obtained
formed the basis of information regarding the existing recruitment and selection
processes at MAX LIFE INSURANCE. and the same is analyzed and interference is
drawn regarding the various aspects of recruitment and the entire process of selection
at MAX LIFE INSURANCE
SAMPLE DESIGN
Sampling technique:
Stratified sampling technique is adopted to conduct the research. Stratified purposive
sapling is a selection method for achieving a greater degree of representatives,
therefore decreasing the probable sampling error. It is based on the concept that a
homogeneous population produces samples with smaller sampling errors than does a
heterogeneous population. Stratified sampling is accomplished by placing all the
members of the population into groups according to some characteristics that is
common among them, that is homogeneous subsets of the population. Then specified
number of unit is chosen from each of the groups or strata by purposive means.
Sampling Plans
The sampling plan consists of sampling units, e.g. from functional departments
namely Marketing, Commercial, Technical and Human Resource. These employees
constitute the manpower in the company who are engaged in the day to day
57
functioning of the company, thus it is very important for them to understand the
various aspects of the entire selection process and also the importance of performance
appraisal system. Therefore, they had been selected for the project sampling
Sample Size:- Sample size was taken 100 to undertake the survey.
58
OBJECTIVE
59
OBJECTIVE OF THE STUDY
To study the awareness of Financial Planning among the people.
To study the importance of Insurance in today’s scenario.
Brand awareness of various private insurance companies.
Preference among different investment tools.
Purpose of buying insurance.
Preference in choosing channel for buying life insurance.
Quality of service provided by agents and clients satisfaction level.
Customer’s perception of improvements brought in by entry of Private
Insurance Companies.
To generate leads for Unit Linked Insurance and the Unit Linked Pension Plans, by
interacting with walking and existing customers of the company.
60
DATA ANALYSIS AND
INTERPRETATION
61
DATA ANALYSIS AND INTERPRETATION
NUMBER OF PEOPLE HAVING INSURANCE
RESPONSE NO. OF RESPONDENTS
Yes 70
No 30
Total 100
INTERPRETATION
Of the sample size of 100 surveyed respondents 70% of the respondents are
having Insurance policy.
30% of the respondents are either not having any Insurance policy at present or
their policy is already matured.
And at present 100% of the respondents are with the view that Insurance is a tool
to protect your family.
62
TYPES OF INSURANCE POLICY RESPONDENTS HAVE
POLICY TYPE NO. OF RESPONDENTS
LIFE POLICY 75
NON LIFE POLICY 25
BOTH 45
INTERPRETATION
75% of the respondents have only Life Insurance Policy.
while 45% of the respondents have both.
25% of the respondents have only Non- life Policy.
[Some of the respondents opted for two or more than two items]
63
PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES
COMPANY’S NAME NO.OF RESPONDENT
L.I.C. 78
RELIANCE LIFE INSURANCE 3
ICICI PRUDENTIAL 10
SBI LIFE 7
Max New York Life 2
TOTAL 100
INTERPRETATION
78% of the people contacted prefer LIC policy to any other and therefore it is
ranked no.1 by that percent of respondents.
64
BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS
BENEFITS NO.OF RESPONDENTS SHARE (%)
Cover Future Uncertainty 55 55
Tax Deductions 20 20
Future Investment 25 25
TOTAL 100 100
INTERPRETATION
55% of the respondents believe that covering future uncertainty is the biggest
benefit of an insurance policy.
Whereas, 20% and 25% of them believe that the other benefits are Tax
deduction and future investments respectively.
FEATURES OF INSURANCE POLICY THAT ATTRACTED RESPONDENTS
FEATURE NO.OF
65
RESPONDENTSMoney Back Guarantee 15Larger Risk Coverage 37
Easy Access to Agents 7Low Premium 30Company’s Reputation 11TOTAL 100
INTERPRETATION
Majority of the respondent (37%) found larger risk coverage as the most
attracted feature of the all.
Minimum respondents (7%) opted for easy access to agents.
66
PEOPLE PERCEPTION ABOUT INSURANCE
RESPONSE NO. OF RESPONDENTS
SHARE (%)
A saving tool 81 81%
A tax saving device 74 74%
A tool to protect your family 100 100%
INTERPRETATION
81% of the respondents have perception of Insurance being a saving tool.
And 74% of the respondents have perception of Insurance being a tax saving
device.
But 100% of the respondents are with the view that Insurance is a tool to protect
your family.
[Some of the respondents opted for two or more than two items]
67
PERSONS HAVING INSURANCE FOR
Response No of respondents
self 40
spouse 28
children 21
parents 18
all 11
INTERPRETATION
Among that 42% people who having insurance, they have insurance 40% for self,
28%for spouse ,21% for children and 18% for their parents and 11% for all family
member.
REASONS BEHIND TAKING INSURANCE
68
RESPONSE NO. OF RESPONDENTS
Tax saving 80
Saving / Investment 80
Family protection 100
INTERPRETATION
80% of the Respondents opted for Insurance for tax saving benefits and
saving/investment both.
But all of them, i.e. 100% of the respondents have opted for insurance for their
family protection.
[Some of the respondents opted for two or more than two items]
69
SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY
RESPONSE NO. OF RESPONDENTS
Satisfied 60
Not satisfied 40
Not Responded 0
Total 100
INTERPRETATION
60% of the respondents are more or less satisfied with their existing policy.
40% of the respondents are not satisfied with their existing policy.
In this case all of those who have taken a policy have responded.
70
SATISFACTION OF +VE RESPONDENTS WITH RESPECT TO SERVICE
AGENT
RESPONSE NO. OF RESPONDENTS
Satisfied 45
Not satisfied 55
Not Responded 0
Total 100
INTERPRETATION
45% of the respondents are satisfied with their existing service agent.
55% of the respondents are not satisfied with their existing insurance agent.
All of those who have taken a policy have responded.
71
NUMBER OF RESPONDENTS PAYING TAX
RESPONSE NO. OF RESPONDENTS
Paying tax 100
Not paying tax 0
Total 100
INTERPRETATION
Of the sample size of 100 respondents, all the respondents are paying tax.
72
RESPONDENTS PERCEPTION ABOUT BEST FORM OF INVESTMENT
FOR SECURING THEIR FUTURE
NO. OF RESPONDENTS
Fixed Assets 75
Bank deposits 11Jewellery 25Securities i.e. bonds, MFs 40.Shares 10Insurance 70
INTERPRETATION
75% of the respondents are with the view that Fixed Assets is the best form of
investment for securing their future.
70% of the respondents are with the perception that Insurance is the best form of
investment for securing their future, which is 2nd highest and this shows that
insurance is an important key for securing your future.
[Some of the respondents opted for two or more than two items]
73
PEOPLE’S PERCEPTION ON APPROPRIATE AGE FOR BUYING
INSURANCE
RESPONSE NO. OF RESPONDENTS
After 25 years 29
After 35 years 10
After 45 years 0
Anytime 61
INTERPRETATION
29% of the respondents are with the view that insurance should be bought after
the age of 25 years.
10% of the respondents are with the view that insurance should be buyed after the
age of 35 years.
Whereas, 61% of the respondents are with the view that buying of insurance do
not have any thing to do with age i.e. there is no age limitations. It can be
purchased any time according to the need.
74
PEOPLES OPINION ABOUT INDIAN INSURANCE COMPANIES
RESPONSE NO. OF RESPONDENTS
Rigid plans 67
Non user friendly 29
Unsatisfactory services 26
Non Aggressive 35
Satisfactory 24
Good 10
Very good 0
INTERPRETATION
67% of the respondents have the opinion that Indian Insurance Companies have
Rigid plans.
29.5% feel that Indian Insurance companies are Non-user friendly.
26.5% feel that services of Indian Insurance companies are Unsatisfactory.
35.75% of the respondents are with the view that Indian Insurance companies are
Non-aggressive.
75
24% of the respondents feel that products and services of Indian Insurance
companies is Satisfactory.
Whereas only 10.25% feel that it is Good enough.
And according to the data, no single person has felt that it is very good.
[Some of the respondents opted for two or more than two items]
76
WHAT PEOPLE LOOK FOR IN AN INSURANCE COMPANY
RESPONSE NO. OF RESPONDENT
S
A trusted name 82
Friendly service & responsiveness
71
Good plans 81
Accessibility 49
INTERPRETATION
82% customers look for a Trusted name in a company for insurance.
81.5% customers look for a good plan in a company for insurance.
Friendly service & responsiveness and Accessibility are also important factors
looked by customers in a company.
[Some of the respondents opted for two or more than two items]
77
PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE
PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE &
PRODUCTS
RESPONSE NO. OF RESPONDENTS
SHARE (%)
Yes 43 43%
No 44 44%
Uncertain 13 13%
Total 100 100%
INTERPRETATION
The interested customers i.e. 43% are ready to go for insurance even away from a
city if services and products are worthwhile, which again is a good prospect
(potential) for Max New york Life Insurance to take them on their favor.
78
PEOPLE PLANNING FOR NEW INVESTMENTS
RESPONSE NO. OF RESPONDENTS
Planning 87
Not planning 13
Total 100
INTERPRETATION
Only 13% of the customers contacted are not planning for new investments
presently.
Whereas, 87% of the customers are still planning for new investments this can be
a great potential for Max New York Life Insurance to take them on their favor.
79
FINDINGS
80
FINDINGS
1. As the people think that insurance is a tool to protect their family & a tax saving
device. They are aware of the fact & realizing its, importance. There is a large
potential for insurance in India.
2. The entrance of private players will increase the competition and it would be a
tough task to secure a good position in market.
3. Since Max New York Life Insurance is leading with several companies’ policies it
should be easy for them to penetrate into the market and secure a good position if they
pay greater attention to the service part provided to their customer and thereby
forming a long and trusted relationship.
4. As seen from the survey that at present 70% of the customer are having insurance
policy out of which 87.5% of the customer are planning for new investments. So it
can be a good potential for the company and they should make an attempt to trap
these customers.
5. As 43% of the customers are even ready to go for insurance if a service provider
away from their city is providing it. But inturn they should provide good products and
services. The company should try to convince these customers and get them in its
favor.
81
CONCLUSION
82
CONCLUSION
Our exhaustive research in the field of Life Insurance threw up some interesting
trends which can be seen in the above analysis. A general impression that we gathered
during Data collection was the immense awareness and knowledge among people
about various companies and their insurance products. People are beginning to look
beyond LIC for their insurance needs and are willing to trust private players with their
hard earned money.
People in general have been impressed by the marketing and advertising campaigns of
insurance companies. A high penetration of print, radio and Television Ad campaigns
over the years is beginning to have it’s impact now.
Another heartening trend was in terms of people viewing insurance as a tax saving
and investment instrument as much as a protective one. A very high number of
respondents have opted for insurance for such purposes and it shows how insurance
companies have been successful to attract public money in recent times.
The general satisfaction levels among public with regards to policy and agents still
requires improvement. But therein lies the opportunity for a relative player like Max
New York Life. LIC has never been known for prompt service or customer oriented
methods and Max New York Life can build on these factors.
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LIMITATIONS
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LIMITATIONS
It was difficult to collect some information because of some company rules.
Interaction with the employees was limited because of the work schedule.
It was difficult to cover all the types of ratios because of lack of information i.e.
regarding inventories, debtor’s turnover etc…..
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RECOMMENDATION
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RECOMMENDATION
Positioning insurance as a means to fulfilling one’s duties during one’s lifetime.
Fears relating to thefts, ailments, death could be addressed through ‘sensitive’
communication
Fears relating to claims: Need to promote “trust”. Demonstrating claim
testimonials, positioning as “worry free”.
Low returns: Reposition insurance as a risk cover, security instrument rather than
a financial investment.
Lack of understanding: Training of Channels
To provide quality advice on products best suited
Lack of Knowledge: Ease of Process, simplifying the product and the procedure
Need to promote the quality of awareness
The benefits: Leverage on Risk Protection or Returns oriented or both
The product: catering to life stages
Need for Branding in Insurance: Branding is more relevant in the Insurance
market which not only faces the problem of securing and retaining customers in
an increasingly competitive marketplace but also experiences the need for
heightened relevance of the brand proposition in a world where brand has been
termed the new religion.
In rural India, the LIC is especially synonymous with insurance. But in the
wake of competition insurance companies have to do a considerable brand
building exercise at least in urban India.
Adequate time, investment and longer-term management of the brand are ssential,
not only for success but also survival. All brands need to be built around well-
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differentiated and credible positioning that springs from the organization’s history.
The brand must not only be believed but lived by management and employees.
Focus on different segments to survive and thrive in a competitive
environment. Each company has to choose its own unique positioning based on its
unique strengths. Below-mentioned positioning alternatives can be worth
considering.
VARIETY-BASED POSITIONING
This type of positioning is based on varieties in products and services rather than
customer segments. It is a sensible strategy for those companies who have
distinctive advantages or strengths in offering certain products and services. In the
insurance industry too, it is possible to achieve a unique position by focusing on
certain category of products.
NEEDS-BASED POSITIONING
This is the most commonly understood positioning and is based on the differing
needs of different groups of consumers. This can be done successfully if a
company has unique strengths to service a group of customer needs better than
others.
The insurance needs of customers vary significantly for different groups of
customers. The insurance needs of young family with small children will be quite
different from that of a family in which the income-earner is close to retirement.
However, in India most of the life insurance companies have a wide variety of
products tailored for different customer needs and there is no company focusing
on a particular customer need.
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ACCESS-BASED POSITIONING
Positioning of customers can also be done by the way they are accessible. That is
different groups of customers may be accessible in different ways even though
they may have similar needs. Access is typically a function of customer
geography or customer scale. There is excellent opportunity in the insurance
industry to employ access-based positioning by targeting the rural insurance
sector.
The rural market for life insurance is very different from the urban market in terms
of needs, income levels and distribution (seasonality, for example), penetration of
media and so on. Rural market can be a highly profitable position if one is able to
carefully plan and tailor an entire set of low-cost activities of advertising,
distribution, and product design etc. to successfully exploit the potential.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
WEBSITES REFERRED www.maxnewyorklife.com www.irdaindia.org www.thehindubusinessline.com
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ANNEXURE
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ANNEXURE
PERSONAL DETAIL FORM
DATE:
NAME:
FATHER’S NAME:
D.O.B:
AGE:
OCCUPATION:
ADDRESS:
CONTACT NUMBER:
FAMILY HISTORY:
NAME :
AGE:
OCCUPATION:
FATHER :
MOTHER:
BROTHER:
SISTER:
E-MAIL:
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Broad syllabus for pre- recruitment exam for life insurance agent:
1. Introduction to insurance:
What is insurance
Purpose and need of insurance
Classification of risk
The human asset
Insurance as a social security tool
Role of insurance in economic development
2. Principles of life assurance:
life insurance contracts
principle of utmost good faith
insurable interest
principle of indemnity
different risks
3. Premium and bonus
what is premium?
Premium calculation
Life fund
Actuarial valuation
Bonus
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4. Life insurance products
basic elements
some popular plans
variable insurance plans
salary saving schemes
riders
annuities
group insurance
5. Underwriting
introduction
classification of risk
financial underwriting
assessing risk
adverse selection
non medical underwriting
recent rends
6. Insurance documents
proposal form and personal statements
first/ renewal payment receipt
policy document
endorsement
prospectus
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7. Policy conditions
age, days of grace
lapse and non- forfeiture
paid up value
revival
assignment, nomination
surrenders and loan
foreclosure
alterations
married women’s property act policy
8. Claims
maturity claims
survival benefit payments
death claims
accident and disability benefits
claims concessions.
9. Unit linked life insurance products
what is linked policy
option of funds
net asset value (NAV)
flexibility
lock in
charges
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ULIP and traditional insurance
Annuities and pensions
10. Insurance agency
definition of an agent
agents’ regulation
procedure for becoming an agent
methods of remunerating agents
agency as a profession
functions of agents
responsibilities of an agent
pre requisites for success
ethical behavior
11. Law and regulations
insurance act 1938
LIC act 1956
IRDA act 1999
Consumer protection act 1986 (COPA)
Ombudsman
Income tax act
MWP act
Rural and social sector
Micro insurance
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