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INTRODUCTION
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INTRODUCTION
Life Insurance Corporation of India till few years ago used to enjoy a complete
monopoly in the life insurance sector of the country. Because of the monopoly it used
to offer the consumers its products at unjustifiable rates and the services were also not
up to the mark.
But because of the changes which were and are being brought about in the Insurance
Act the life insurance sector has seen the emergence of many private players. With the
emergence of these private players the Life Insurance Corporation of India is facing a
stiff competition from them not only in terms of price but also in terms of the services
provided.
The big question which arises is that will the old horse be able to survive the
competition or will the new players emerge victorious. How will these players
differentiate their products? Will these private players be able to survive in the future
or is it just a temporary phase of flooding of the Indian life insurance market with
products in quantity and not in quality? What are the prospects of these private
players in the insurance market in future and how much impact they have created on
Indian consumer?
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CONCEPTUAL
FRAMEWORK
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WHAT IS LIFE INSURANCE ?
Life Insurance is a contract for payment of a sum of money to the person assured (or
failing him/her, to the person entitled to receive the same) on the happening of the
event insured against.
Usually the insurance contract provides for the payment of an amount on the date of
maturity or at specified dates at periodic intervals or at unfortunate death if it occurs
earlier. Obviously, there is a price to be paid for this benefit. Among other things, the
contract also provides for the payment of premiums by the assured. Life Insurance is
universally acknowledged as a tool to eliminate risk, substitute certainty for
uncertainty and ensure timely aid of the family in the unfortunate event of the death of
the breadwinner. In other words, it is the civilized world's partial solution to the
problems caused by death. (1)
In a nutshell, life insurance helps in two ways: premature death, which leaves
dependent families to fend for itself and old age without visible means of support.
Any person who has attained majority and is eligible to enter into a valid contract can
take out a life insurance policy for himself / herself. Policies can also be taken out,
subject to certain conditions, on the life of ones children.
The need for life insurance will change as you grow older. When you are young, you
may believe you have no need for life insurance. But as you grow older, possibly get
married and take on more responsibilities, your desire to take out an insurance policy
increases.
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What is the reach and significance of Life Insurance as an economic activity?
So long as the maintenance of a family depends on the earning power of the
bread-winner.
So long as the earning can be destroyed by death, old age or disability.
Just so long life as insurance continues to be the keystone of the individual and
those who are dependent on him.(2)
Thus, life insurance is universal and will play a useful role as long as the family set up
survives. Life Insurance caters to an important social need.
NEED FOR LIFE INSURANCE
The need for life insurance comes from the need to safeguard our family. If you care
for your familys needs you will definitely consider insurance. Today insurance has
become even more important due to the disintegration of the prevalent joint family
system, a system in which a number of generations co-existed in harmony, a system in
which a sense of financial security was always there as there were more earning
members. Times have changed and the nuclear family has emerged. Therefore you
need to save a part of income for the future too.
This is where insurance helps us.
Factors such as fewer numbers of earning members, stress, pollution, increased
competition, higher ambitions etc are some of the reasons why insurance has gained
importance and where insurance plays a successful role.
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Insurance provides a sense of security to the income earner as also to the family.
Buying insurance frees the individual from unnecessary financial burden that can
otherwise make him spend sleepless nights. The individual has a sense of consolation
that he has something to fall back on.
From the very beginning of your life, to your retirement age insurance can take care
of all your needs. Your child needs good education to mould him into a good citizen.
After his schooling he need to go for higher studies, to gain a professional edge over
the others - anecessity in this age where cut-throat competition is the rule. His career
needs have to be fulfilled.
Insurance is a must also because of the uncertain future adversities of life. Accidents,
illnesses, disability etc are facts of life which can be extremely devastating. Disability
can be taken care of by insurance. Your family will not have to go through the grind
due to your present inability.
Moreover, retirement, an age when every individual has almost fulfilled his
responsibilities and looks forward to relaxing can be painful if not planned properly.
Have we considered the increasing inflation and taxes? Will our investment offer us
attractive returns under such circumstances? Will it take care of our family after us?
An insurance policy will definitely take care of these and a lot more. Insurance has
become a necessity today. It provides timely financial as also rewards with bonuses.
Life Insurance has come a long way from the earlier days when it was originally
conceived as a risk covering medium for short periods of time, covering temporary
risk situations, such as sea voyages.
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Therefore after going through the discussion let us summarize our points and
understand the need of life insurance:
a) Temporary needs / threats
The original purpose of life insurance remains an important element, namely
providing for replacement of income on death etc.
b) Regular Savings / Family Protection
Providing for one's family and oneself, as a medium to long term exercise (through a
series of regular payment of premiums). This has become more relevant in recent
times as people seek financial independence for their family.
c) Investment
Put simply, the building up of savings while safeguarding it from the ravages of
inflation. Unlike regular saving products, investment products are traditionally lump
sum investments, where the individual makes a one off payment.
d)Old age provision
Provision for later years becomes increasingly necessary, especially in a changing
cultural and social environment. One can buy a suitable insurance policy, which will
provide periodical payments in one's old age.
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e) Children benefit
Provision for the education, marriage and start in life for the children.
f) Special needs provision
Protection against loss arising out of accident, disability, sickness, loan repayment on
death.
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WHY IS INSURANCE SUPERIOR TO OTHER FORM OF
SAVINGS?
An immediate estate is created in favor of the policy holder.
Protection in case of death.
Liquidity in case of need easy loans are available .
Tax relief income tax, wealth tax etc..
Policies can be offered as collateral security.
Policies can be taken under M.W.P. Act 1874, to protect against creditors.
Let us take an example to understand the need for insurance:
Mr. Atul is 45 and self-employed. His wife Nandini, who is a housewife, looks after
their two children aged 3 and 7 years. They stay in a rented accommodation, where
the rent is 15,000 rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakh. His
monthly earnings on average are 40,000 rupees. Mr. Atul passes away in an
unfortunate road accident. What are some of the financial implications of his death on
his family.
There may be several financial implications on his family. Some of these are:
a) The monthly income, previously provided by Mr. Atul would stop.
b) His wife and children may have to seek financial assistance from other relatives.
c) His wife may not have enough money to pay back the loan of Rs. 2 lakhs.
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d) The family may have to move into a cheaper accommodation.
e) His widow may have to take up work to earn money.
f) The education of his children may suffer.
This simple example illustrates the impact premature death can have on a family,
where the main earner has no life cover.
Had Mr. Atul taken life cover, his family would not have faced such hardships in the
event of his unfortunate death. A simple life insurance policy could have provided
Mr. Atul's family with a lump sum that could have been invested to provide an
income equal to all or part of his income.
In simple words, insurance protects against untimely losses. Insurance has been found
useful in the lives of persons both in the short term and long term. Short term needs
like sudden medical costs and long term needs like marriage expenses etc can be met
with using life insurance.
TYPES OF INSURANCE POLICIES
Though there are a lot of policies available in the market under different names and
by different companies, the policies can broadly be classified into the following
categories:
Term Insurance Policy
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Whole Life Policy
Money Back Policy
Endowment Policy
Pension Plans Or Annuities
TERM INSURANCE POLICY
Term insurance provides life insurance coverage for a specific period of time.
Presently one year, five year, ten year, and fifteen year, are the periods one can buy
term life insurance policy. If the insured person dies during the period the insurance is
in force, the insurance company pays off the face value of the policy. If the insured
lives longer than the term of the policy, the policy is no longer in effect and nothing is
paid.
Term insurance is the least expensive form of life insurance. It is commonly used
when the insured needs temporary protection or cant afford the premiums for the
other forms of life insurance. The other reason an insured may want term insurance is
to purchase life insurance and invest the difference between the term policy and cash
value policy elsewhere.
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Term insurance comes in several forms. There is renewable & non renewable. Non
renewable means that on the expiry of your policy you must go under another
physical test and filling out another questionnaire. On the other hand, with renewable
policy you dont need to undergo these formalities again and you automatically re
qualify to continue your policy.
Then there is convertible & non convertible policy. Convertible policy is the one
which can be converted into a permanent policy, whereas non convertible is the one
which cannot be converted into a permanent policy or in other words the policy
cannot be converted to any other form of life insurance policy.
WHOLE LIFE POLICY
The whole life policy provides insurance coverage for the entire life of the insured
regardless of how many years the insurance is paid. Premiums may be paid
throughout the insureds entire life or for a portion of his life. Additionally, the
premium can be paid in one lump sum when the policy is taken out. This is referred
to as a single premium whole life policy.
When the premium is paid through out the life it is known as straight life policy, but
when the premium is paid for a specified period of time it is known as limited life
policy.
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The premiums are higher for Whole life insurance as opposed to term insurance. The
reason for this is that the policy has investment features as well as death benefits. The
cash value portion of the whole life insurance belongs to the insured. One can take it
out in the form of policy loans or can cash the policy in. Another advantage of whole
life insurance is that the premiums are fixed, i.e. regardless of your age, you pay the
same amount for the coverage each year.
Universal Life Insurance Policy
Universal life insurance is a variation of Whole Life. The difference is that with
Universal Life the insurance part of the policy is separated from the
investment portion of the policy. The cash value portion of the policy is
treated as an accumulation fund and investment income is credited to the
accumulation fund.
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MONEY BACK POLICY
Money back policies provide for periodic payments of partial survival benefits during
the term of the policy, as long as the policy holder is alive.
An important feature of this type of policies is that in the event of the death at nay
time within the policy term, the death claim comprises the full sum assured, without
deduction of nay of any of the survival benefit amounts, which may have already been
paid as money back components. Similarly the bonus is also calculated on the entire
sum assured.
ENDOWMENT POLICY
An endowment policy covers the risk for a specified period, at the end of which the
sum assured is paid back to the policy holder, along with the bonus accumulated
during the term of the policy. This feature of payment of endowment to the policy
holder when the policys term is complete is responsible for the popularity of
endowment policies.
The amount received on maturity can either be utilized either to buy an annuity policy
to generate a monthly pension for the rest of the life, or put it into any other suitable
investment of our choice. This is one important benefit which the endowment policy
offers over a whole life insurance policy.
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Overall, endowment policies are the most suitable of all insurance plans for covering
the risks to a family breadwinners life. Not only do these policies provide financial
risk cover for the family, were the policy holder to die prematurely but the insurance
amount is also repaid once this risk is over. The endowment amount can then be used
for meeting major expenditures such as childrens education and marriage, etc.
Alternately, the endowment sum is available for a suitable investment geared to
providing an income for the remainder of ones own life. These type of plans are
particularly suitable to those who other than having a risk cover are also interested in
a savings component simultaneously.
PENSION PLAN OR ANNUITIES
An annuity is an investment that we make, either in a single lump sum or through
installments paid over a certain number of years, in return for which we receive a
specific sum every year, every half year or every month, either for whole life or a
fixed number of years.
After the death of an annuitant, or after the fixed annuity period expires for annuity
payments, the invested annuity fund is refunded, perhaps along with a small addition,
calculated at that time. Annuities differ from all the other form of life insurance in one
fundamental way an annuity does not provide any life insurance cover but, instead
offers a guaranteed income either for life or a certain period.
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Typically annuities are bought to generate income during ones retired life, which is
why they are also called pension plans. Annuity premiums and payments are fixed
with reference to the duration of human life.
Kind Of Policy
Broad Definition When Received
Term Policy Like whole life but offers risk
cover for defined periods.
Risk cover in case of
death within term of
policy.
Whole life Policy Allows risk cover for whole life.
Premiums are paid throughout
life.
Received only at the
time of death of life
assured.
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Money Back Policy Allows planning return of sum
assured as lump sum after
defined intervals of time.
Received at fixed
intervals during the term
of the policy.
Endowment Policy Available for a period and life.
Sum assured may be paid in case
of death within the term of the
policy.
Either on maturity or in
the event of death of the
insured, whichever is
earlier the sum assured
plus the bonus is
received by the
beneficiary.
Pension Plans Or
Annuities
Installments paid for certain
years and in turn a specific sum
is received every year or month.
Either on the death of
the annuitant or on
expiry of the fixed
annuity period.
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SETTLEMENT OPTIONS
When the life insurance policy becomes payable, the insured or the beneficiaries may
elect to take payment in one lump sum. However, when the insured or the beneficiary,
elect not to take a lump sum payment, there are several other options available to him
for receiving his payment which are as follows:
1. INTEREST OPTION
According to this option, the entire proceeds are left with the insurance company
and it pays a guaranteed interest rate on your amount, it is similar to leaving our
money in a savings account. At any time in the future, the beneficiary can
withdraw the money.
2. FIXED AMOUNT OPTION
In this option the beneficiary receives a fixed amount of money each month until
the proceeds are exhausted.
3. FIXED PERIOD OPTION
The fixed period option will pay the beneficiary equal payments over a fixed
period of time, which may be 10 years ,20 tears or even just 5 years. Excess
interest earned will increase the amount of these payments.
4. LIFE INCOME OPTION
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This option provides the beneficiary with the proceeds paid over the rest of his
life. However when the beneficiary dies the balance of the policy are considered
used up.
CHECK LIST FOR BUYING THE RIGHT POLICY
DOS
Look out for no commission policies.
low load life insurance policies have fewer expenses built into them, such
as agent commissions and fees for marketing. This can translate into lower
premiums or for variable life insurance, these lower expenses mean that a
higher percentage of your premium goes to work for you right away so that
you can build your cash faster.
Buy as soon as the need exists
An advantage to buy life insurance earlier in life is that your premiums will be
low. As you grow old, the likelihood that you will die increases, which is why
older individuals pay more for life insurance.
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DONTS
Dont buy a guaranteed issue policy if you are healthy
Guaranteed issue term life insurance policies normally require no medical
exam and are sold to anyone who comes along. While these policies can be a great
way for people who have medical problems to obtain a life insurance policy, if
you are healthy dont buy these policies as you will get better rates by taking the
tests.
Dont buy more or less than you need
Many experts say the best way to pinpoint a smart life insurance benefit
amount is through a needs analysis which can be broken into a simple formula
Short term needs + long term needs resources = how much life insurance
you need
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HISTORY AND
GROWTH OF LIFE
INSURANCE IN INDIA
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HISTORY OF INSURANCE
The story so far
Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk of
the caravan trade by giving loans that had to be later repaid with interest when the
goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the
practice.
That, perhaps, was how insurance made its beginning.
Life insurance, on the other hand, had its origins in ancient Rome, where citizens
formed burial clubs that would meet the funeral expenses of its members as well as
help survivors by making some payments.
As European civilization progressed, its social institutions and welfare practices also
got more and more refined. With the discovery of new lands, sea routes and the
consequent growth in trade, Medieval guilds took it upon themselves to protect their
member traders from loss on account of fire, shipwrecks and the like.
Since most of the trade took place by sea, there was also the fear of pirates. So these
guilds even offered ransom for members held captive by pirates. Burial expenses and
support in times of sickness and poverty were other services offered. Essentially, all
these revolved around the concept of insurance or risk coverage. That's how old these
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concepts are, really.
In 1347, in Genoa, European maritime nations entered into the earliest known
insurance contract and decided to accept marine insurance as a practice.
The First Step
Insurance as we know it today owes its existence to 17th century England. In fact, it
began taking shape in 1688 at a rather interesting place called Lloyd's Coffee House
in London, where merchants, ship-owners and underwriters met to discuss and
transact business. By the end of the 18th century, Lloyd's had brewed enough business
to become one of the first modern insurance companies.
Insurance and Math
Back to the 17th century. In 1693, astronomer Edmond Halley constructed the first
mortality table to provide a link between the life insurance premium and the average
life spans based on statistical laws of mortality and compound interest. In 1756,
Joseph Dodson reworked the table, linking premium rate to age.
Enter Companies
The first stock companies to get into the business of insurance were chartered in
England in 1720. The year 1735 saw the birth of the first insurance company in the
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American colonies in Charleston, SC.
In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance
corporation in America for the benefit of ministers and their dependents. This was
followed by the formation of Fire Insurance Corporations, first in New York City
(1787) and then in Philadelphia (1794).
However, it was after 1840 that life insurance really took off in a big way. The
trigger: reducing opposition from religious groups.
The Growing Years
The 19th century saw huge developments in the field of insurance, with newer
products being devised to meet the growing needs of urbanization and
industrialization.
In 1835, the infamous New York fire drew people's attention to the need to provide
for sudden and large losses. Two years later, Massachusetts became the first state to
require companies by law to maintain such reserves. The great Chicago fire of 1871
further emphasized how fires can cause huge losses in densely populated modern
cities. The practice of reinsurance, wherein the risks are spread among several
companies, was devised specifically for such situations.
There were more offshoots of the process of industrialization. In 1897, the British
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government passed the Workmen's Compensation Act, which made it mandatory for a
company to insure its employees against industrial accidents.
With the advent of the automobile, public liability insurance, which first made its
appearance in the 1880s gained importance and acceptance.
In the 19th century, many societies were founded to insure the life and health of their
members, while fraternal orders provided low-cost, members-only insurance.
Even today, such fraternal orders continue to provide insurance coverage to members
as do most labour organizations. Many employers sponsor group insurance policies
for their employees, providing not just life insurance, but sickness and accident
benefits and old-age pensions. Employees contribute a certain percentage of the
premium for these policies.
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IN INDIA
Insurance in India can be traced back to the Vedas. For instance, yogakshema, the
name of Life Insurance Corporation of India's corporate headquarters, is derived from
the Rig Veda. The term suggests that a form of "community insurance" was prevalent
around 1000 BC and practiced by the Aryans.
Burial societies of the kind found in ancient Rome were formed in the Buddhist
period to help families build houses, protect widows and children.
Bombay Mutual Assurance Society, the first Indian life assurance society, was formed
in 1870. Other companies like Oriental, Bharat and Empire of India were also set up
in the 1870-90s.
It was during the swadeshi movement in the early 20th century that insurance
witnessed a big boom in India with several more companies being set up.
As these companies grew, the government began to exercise control on them. The
Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act
of 1938 that looked into investments, expenditure and management of these
companies'funds.
By the mid-1950s, there were around 170 insurance companies and 80 provident fund
societies in the country's life insurance scene. However, in the absence of regulatory
systems, scams and irregularities were almost a way of life at most of these
companies.
As a result, the government decided nationalize the life assurance business in India.
The Life Insurance Corporation of India was set up in 1956 to take over around 250
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life companies.
For years thereafter, insurance remained a monopoly of the public sector. It was only
after seven years of deliberation and debate - after the RN Malhotra Committee report
of 1994 became the first serious document calling for the re-opening up of the
insurance sector to private players -- that the sector was finally opened up to private
players in 2001.
Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
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The insurance 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 insurance sector reveals the 360 degree turn witnessed
over a period of almost two centuries.
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EFFECT OF LIBERALISATION
The winds of liberalization have initiated vast changes in the functioning of the
industry today. Increasing number of multi national partnerships with private insurers
have paved the way for radical shift in insurance selling through a number of new
distribution channels besides bringing about more awareness on the need for
insurance and also stressing on the important role technology can play.
With major trade barriers, gone the Indian insurance industry is slowly opening itself
from a protected environment to e business, incorporating newer technology in
insurance.
The opening up of the sector is paving way for :
Faster decision making
Easier claim settlement
Bank assurance
Improved customer service
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Utilizing the extensive network of banks for selling insurance will over a period of
time bring about an increase in insurance density besides improving insurance
penetration in rural areas wherein a large unexploited potential exists.
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 committee emphasized that in order to improve the customer services and
increase the coverage of the insurance industry should be opened up to competition.
But at the same time, the committee felt the need to exercise caution as any failure on
the part of new players could ruin the public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating the
minimum capital requirement of Rs.100 crores. The committee felt the need to
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provide greater autonomy to insurance companies in order to improve their
performance and enable them to act as independent companies with economic
motives. For this purpose, it had proposed setting up an independent regulatory body.
THE INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY
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.
The other decisions taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of the
IRDAs online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to
sell their products, which are expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a framework
of globally compatible regulations. In the private sector 12 life insurance and 6
general insurance companies have been registered.
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The important functions of IRDA are as follows:
To exercise all powers & functions of controller of Insurance.
Protection of the interest of the policyholders.
To issue, renew, modify, withdraw or suspend certificate of registration.
To specify requisite qualification & training for insurance intermediaries &
agents
To promote & regulate professional organization connected with Insurance.
To conduct Inspection/investigations etc.
To prescribe method of Insurance Accounting.
To regulate investment of funds & margins of solvency.
To adjudication upon disputes.
To conduct inspection & audit of insurers, intermediaries & other
organizations concerned with Insurance.
Current Status
The IRDA bill had been introduced in the Lok Sabha during the Vajpayee
governments last tenure with the expected mixed reactions. The Banking Regulation
Act is to be modified to allow banks to become active players in the insurance sector.
This comes as a major move
The takeout of the amendment made to Section 6 (0) of the Banking Regulation Act,
1949 is this: the current act does not permit banks to handle insurance products. The
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proposed change will permit banks to either distribute or to market insurance
products. In addition to this, banks will also be allowed entry to the insurance sector
through the joint venture route and bank assurance. It is understood that only strong
banks with three-year track records will be allowed to enter the business - entry is a
strict no-no to the weaker banks. The Insurance Regulatory and Development
Authority (IRDA) Bill provides for three levels of players - an insurance company,
insurance broker and an agent. Banks will work as agents and brokers in this proposed
structure.
This is an attempt to make the insurance sector more dynamic - this is likely to
happen as banks will use their formidable branch network to market and distribute the
insurance products.
The Indian insurance industry which until now was a controlled sector, with only two
players for the last four and half decades, has suddenly turned itself into a
battleground. Though the sector remained in the strong clutches of the government
enterprises, the growth has been slow. The industry is characterized by a number of
players, both domestic and international, competing for the huge untapped market.
The Indian insurance sector is witnessing a slow and steady change. Though the
sector is yet to come out of the Government control completely, the new entrants are
hopeful of competing head-on with the state-owned monopolies and create a niche for
themselves.
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COMPANY PROFILE
AVIVA LIFE INSURANCE
THE COMPANY
Aviva Life Insurance is a joint venture between Dabur and Aviva. Aviva Plc is UK's
largest insurance group. Today, with 25 million customers in over 50 countries and
assets under management in excess of US $300 billion AVIVA life insurance is the
oldest company in the world and is a pioneer in its own field. It is the 3 rd largest Life
insurance company in the global. It has its root in U.K where it is the largest insurer.
Most lives in U.K are covered by AVIVA. The asset of AVIVA is over $300 billion.
It has got 25 million customers worldwide and reaping the benefit of the product.
Around 64,000 people are working for AVIVA worldwide. It has 40 major
partnerships with leading banks across the globe.
In India it has tied up with well know and admired company DABUR. The joint
venture is form to cater the growing need of life insurance.
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Founded in 1884, Dabur is one of India's oldest and largest group of companies with
annual sales of Rs. 1,200 crores. It is the country's leading producer of traditional
healthcare products.
Together they have been looking after generations of customers, over hundreds of
years, and are committed to ensuring that we enjoy the very best financial health.
Aviva Life Insurance aims for superior long-term investment performance and has the
financial and management strength to deliver. Along with millions of customers
worldwide we can feel certain of our choice, whether we invest for the future or
provide against the unexpected.
WHO ARE THEY
Aviva Plc is the largest UK based life and general insurance group. A top priority at
Aviva Plc has been the establishment of truly international businesses built on
strong local partnerships and joint ventures. The Group's success in combining
this strategy with a well-balanced portfolio of life and general business can be
seen in a modern, unified operation across the globe.
Aviva Plc is one of the major institutional investors in the UK, holding 3% of British
industry quoted on the London Stock Exchange and 7% of the UK gilt market. It is a
top-five European life insurer based on premium income, with leading positions in the
UK, the Netherlands, Ireland, Poland, Spain, Singapore and Turkey. The Group is
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among the top 10 asset managers in Europe and the second-largest UK-based fund
manager by reference to funds under management, which exceed US $300 billion.
Aviva Plc's service standards, responsiveness and portfolio of products are
customized to suit the individual needs and requirements of its customers across the
world. The Group's 64,000 employees serve more than 25 million customers
worldwide.
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Promoters
Dabur
Founded in 1884, Dabur is one of India's oldest and largest group of companies with a
consolidated annual turnover in excess of Rs 2,396 crores. A professionally managed
company, it is the country's leading producer of traditional healthcare products.
Corporate website: http://www.dabur.com
Aviva plc
Aviva is the UKs largest and the worlds fifth largest insurance Group. It is one of
the leading providers of life and pensions products to Europe and has substantial
businesses elsewhere around the world. With a history dating back to 1696, Aviva has
a 50 million customer base worldwide. It has more than 381 billion of assets under
management.
Corporate website: http://www.aviva.com
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MANAGEMENT TEAM
TR Ramachandran - Chief Executive Officer & Managing Director
TR Ramachandran is the Chief Executive Officer and Managing Director at Aviva
India, since November 1, 2008. He is responsible for enhancing Indian operations
through strengthening Bancassurance and alternate sales channels, improving
operating performance, enhancing the productivity of the direct sales force and
aligning the goals of the company with customer and employee satisfaction. Ram also
helps in building Avivas employer brand and the Spirit of Aviva.
Prior to this, he was working with Citibank, where he developed strategic plans for
business growth and business start-ups. He was also responsible for developing
infrastructure, market expansion, product development and product launches. His 19
years of financial services experience is spread across retail banking, consumer
finance and credit cards services. Ram has led large teams of diverse employees and
has a proven track record of building franchises, delivering business results and
general management.
Abhay Johorey - Chief Operating Officer
Abhay Johorey is the Chief Operating Officer at Aviva India. He joined the company
in October 2005. In his current capacity, he plans and drives high-impact, strategic
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initiatives involving large scale organisational change, including facilitating our
leadership charter projects. Abhay also leads and manages complex stakeholder
relationships and multi-disciplinary cross-functional teams to enable this. He plays the
role of a vital link between the supply-side delivery functions and customer-facing
demand management of the firm.
Abhay started his career with Citibank, India in 1990. Over the past 18 years, he has
gained vast experience across the retail and wholesale segments of the financial
services domain.
Rajeev Arora Director, Finance & Actuarial
Rajeev Arora has been the Director, Finance and Actuarial at Aviva India since
September 1, 2007. He joined the company in 2003 as an Associate Director,
Business Risk and Internal Audit. Currently, Rajeev provides strategic direction in
creating synergies between the Finance and Actuarial segments and also manages the
financial performance of Aviva India. His role also includes building strong
capabilities in financial planning, accounting, valuations, reinsurance accounting,
financial reporting, profit accounting and all IRDA-related compliances.
Prior to joining Aviva, Rajeev has worked with PriceWaterhouse Coopers, Ernst and
Young, and Deloitte & Touch.
Shoumitro Roye Sales Director
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Shoumitro Roye has been the Sales Director at Aviva India since July 2007. His
objective has been to create synergies within the sales functions and bring in
necessary focus and drive business. Shoumitro manages both the Direct Sales Force
and the Bancassurance divisions of Aviva India. He has played a key role in the
acquisition of Eagle Insurance, Sri Lanka.
Prior to joining Aviva, Shoumitro worked with BNP Paribas and American Express
Bank Limited. He has more than 19 years of proven sales management experience at
various levels.
Anil Sahgal Director, Strategy & Chief Investment Officer
Anil Sahgal has been the Director - Strategy and Chief Investment Officer at Aviva
India since April 2007. He joined the company in 2001. At present, Anil manages a
portfolio of strategic projects.
At Aviva India, he has led the transition of the fund management team into a customer
and sales focused team, while delivering strong performance results. Anil has also
held various key positions in operations and strategy. Prior to this, he has worked with
Dundee Investment Management, amongst others.
Monica Agrawal Director, Corporate Initiatives
Monica Agrawal, has been the Director, Corporate Initiatives, since February 2008.
She is responsible for implementing a wide range of high-impact strategic and
business initiatives. Monicas role is to bridge between strategy and implementation
and her responsibility is to focus on executing projects that will facilitate the growth
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and scope of the business. She is also a part of the team responsible for implementing
vision, innovations and delivery of the business plan.
Prior to joining Aviva, Monica has worked with MasterCard Worldwide Group,
HSBC Ltd and Bennett, Coleman & Company Ltd amongst others.
Chandan Khasnobis Appointed Actuary
Chandan Khasnobis is the Appointed Actuary at Aviva India. He joined the company
in October 2003. At present, he manages product design and development, valuation,
investment decisions and duties within an administrative and regulatory capacity, to
ensure that the company runs on sound financial lines and meets its business
objectives.
Prior to joining Aviva, Chandan has worked with Canada Life Limited in UK,
Zimbabwe Actuarial Consultants, KenIndia Assurance Company Limited and the Life
Insurance Corporation of India.
Mohammad Shahber Associate Director, Human Resources
Mohammad Shahber has been the Associate Director, Human Resources (HR) at
Aviva India since April 2007. He joined the company in July 2006. Shahber is
responsible for leading the Corporate and Regional HR team, supporting the
development and implementation of robust processes facilitating HR operations and
ensuring compliance with relevant statutory rules and regulations. He is also
responsible for talent acquisition and organisational development.
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Prior to joining Aviva India, Shahber has worked with Bharti Infotel Ltd (Airtel) and
Hughes Escorts Communications Ltd., amongst others.
Ronald Cheyne Director, Distribution
Ronald Cheyne has been the Director, Distribution at Aviva India since September
2007. He is responsible for developing Avivas direct sales force and enhancing its
quality, effectiveness and management. Ronald has been instrumental in establishing
ASTRA and implementing a post selection programme for branch and agent
profitability. He has also played an important role in developing the capabilities of the
senior sales management teams.
Prior to this, Ronald has worked with Eagle, Windsor Life Assurance Co. Ltd., New
York Life Worldwide Inc. and Canada Life, amongst others. He has a rich
international industry experience of nearly 27 years.
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AVIVA LIFESHIELD PLUS
Overview
Aviva LifeShield plus provides comprehensive protection for your family at a
nominal cost through:
Payment of Life Cover (Sum Assured) to your family in the event of your
death, with a provision of double the Life Cover in the case of an accidental
death.
Immediate payment of the Life Cover in the case of critical illness or
permanent total disability, while life cover continues till the policy term
Most competitive rates
AVIVA LITTLE MASTER
Overview
Aviva Little Master is a holistic child plan that enables you to secure your child's
future in any eventuality and also covers your child's life through:
Attractive returns in addition to bonus units value on maturity, to help you
enhance the desired corpus for your child
Payment of the Sum Assured to the child or appointee (if the child is a minor),
in the unfortunate event of patent's death, disability or on contracting a critical
illness. All future premiums are waived off and invested as a lump sum
amount in the funds and the policy continues
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Provision of a regular income for the minor child, in the event of parent's
death
Life cover on the child
FREEDOM LIFE PLAN
Overview
Freedom Life Plan allows you to choose the proportion of savings and protection and
change it, in line with your changing needs, with the option to pay premiums for as
few as 3 years, through:
Option to reduce premium and increase / decrease Life Cover (Sum Assured)
Range of cover from 5*AP to 1.25*PT*AP
Select from three riders Accidental Death and Dismemberment Rider
(AD&D) , Critical Illness and Permanent Total Disability Rider (CI&PTD) ,
Hospital Cash Benefit Rider (HCB)
Indexation to protect savings & protection against inflation
Limited premium paying term(PPT) including 3 & 5 years, with an option to
increase the PPT (if PPT>=10)
5 fund options (Growth, Balanced, Enhancer, Protector, Bond), AAA & STP
100% allocation from sixth year
Mentioned as one of the top 2 products with the lowest charges in Outlook magazine
Pensionplus
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Overview
Pension Plus is a market leading pension plan that helps you accumulate and grow
your investments, to fund your post-retirement years through:
Attractive returns (one of the best in the industry, enhanced by loyalty
additions for all regular premium polices, with policy term of at least 20 years)
Option of Indexation and Additional Regular Premium to beat inflation as well
as align the retirement corpus with the desired lifestyle post-retirement
AVIVA LIFESHIELD PLUS
Overview
Aviva LifeShield plus provides comprehensive protection for your family at a
nominal cost through:
Payment of Life Cover (Sum Assured) to your family in the event of your
death, with a provision of double the Life Cover in the case of an accidental
death.
Immediate payment of the Life Cover in the case of critical illness or
permanent total disability, while life cover continues till the policy term
Most competitive rates
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Aviva Health Plus
Overview
Aviva Health Plus is a comprehensive health cum savings plan that covers you against
death and ill health, while guaranteeing the return of a part of the premium on
maturity through:
Provision of a Life Cover (Sum Assured) on death and disability
Protection against 18 critical illnesses
A combined benefit of more than Rs 21 lakh, in case all health benefits are
claimed
Extended death and disability cover for 5 years after the health benefits cease
Guaranteed maturity benefit on the date of maturity, even if all health benefits
are claimed.
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LIFE LONG
Life Long is a flexible whole life plan designed to suit your individual requirements,
no matter which life stage you are in and change as your needs change during your
entire life. For younger families, maximum protection can be provided at moderate
cost but as the need for protection in future reduces, the sum insured under the policy
may be reduced, thus increasing the savings content.
LIFE SAVER
Life Saver is a flexible endowment plan designed to meet your specific long-term
savings needs such as education and wedding costs, with the added reassurance of life
cover to meet those costs should something untoward happen before the policy
matures.
LIFE BOND
Life Bond is a single premium savings plan designed by Aviva to provide you the
maximum benefit of investment return and the security of the investment to match
your medium term savings needs.
CORPORATE LIFE
Corporate Life is a product designed primarily for the corporate sector to provide life
cover to their employees. The product can also be targeted at other suitable groups.
This is a group term insurance product, which provides cover against risk of death.
The Corporate is the master policyholder. It is a yearly renewable product. Additional
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covers against accidental death and permanent total disability are also available, if
opted for by the master policyholder.
EASY LIFE PLUS
Easy Life Plus is designed to be a simple regular savings plan with the benefit of life
protection. By choosing an appropriate premium level and term, you can match the
maturity date of the policy to a specific savings need such as childrens education,
wedding, etc. Easy Life Plus is specially designed for members of select groups such
as Bank Customers, Employer-Employee, or any other similar recognized group.
CREDIT PLUS
Credit Plus is a product specially designed for Micro Finance Institutions who provide
loans to individuals in the rural and social sectors and who would also like to provide
some financial security to the families of these individuals (members).This is a yearly
renewable group term insurance scheme which provides death cover on group basis.
PENSION PLUS
Pension Plus is a tax efficient personal pension plan that is designed to help you earn
a regular income even after you stop working. Through this plan, you build a fund till
you retire which provides you financial security on retirement.
SECURE LIFE
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Secure Life is an ideal life insurance plan that helps you protect your familys future.
Depending on your requirements, whether it be for your childs education or
marriage, loan repayments, etc., Secure Life ensures that your familys needs are met
should something unfortunate happen to you. What is more, the entire premium that
you pay during the policy term is returned to you on survival, at maturity.
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COMPANYS PROFILE
MAX NEW YORK LIFE INSURANCE COMPANY LTD.
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.
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
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paid up capital is Rs. 587 crore, which is more than the norm laid down by Insurance
Regulatory Development Authority (IRDA).
Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its
business. The company is using a five-pronged strategy to pursue alternative channels
of distribution. These include the franchisee model, rural business, direct sales force
involving group insurance and telemarketing opportunities, banc assurance and
corporate alliances.
Customers to Max New York Life offer a suite of flexible products. It now has 22 life
insurance products and 8 riders that can be customized to over 400 combinations
enabling choose the policy that best fits their need.
Max New York Life is the first life insurance company in India to be awarded the IS0
9001:2000 certifications.
Max New York Life was among the top 25 companies to work with in India,
according to 2003 Business World magazine, "Great Workplaces In India", Max New
York Life was ranked at the 20th position. This survey is the local version of the
"Great Places to Work" survey carried out every year in 22 countries.
We were among top five most respected private life insurance companies in India
according to a 2004 Business World survey.
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We have truly built an enviable sales force. With 201 agents becoming members of
the MDRT in 2005, Max New York Life has moved up in the Top 50 MDRT global
list.
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ABOUT NEW YORK LIFE
New York Life Insurance Company, a Fortune 100 company founded in 1845, is
the largest mutual life insurance company in the United States and one of the largest
life insurers in the world. Headquartered in New York City, New York Lifes family
of companies offer life insurance, annuities and long-term care insurance. New York
Life Investment Management LLC provides institutional asset management and
retirement plan services. Other New York Life affiliates provide an array of securities
products and services, as well as institutional and retail mutual funds.
The mission of New York Life is to maintain its superior 'financial strength', adhere to
the highest standards of 'integrity' and demonstrate 'humanity' by treating its
customers, agents and employees with compassion, consideration and respect.
New York Life is one of the largest and strongest life insurance companies in the
world with more than USD$215 billion assets under management and has received
among the highest ratings for financial strength from the life insurance industry's
principal rating agencies: A.M. Best (AA+), Standard & Poor's (AA+), Moody's
(Aa1), Fitch (AAA). According to Moody's, "New York Life's rating reflects the
company's good quality investment portfolio, ample liquidity, and sound
capitalization, as well as the good growth potential of its international business.
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As a leader in the insurance industry, New York Life continues to bring to its
operations new management concepts, advanced technologies, new distribution and
training systems and innovative insurance products.
ABOUT MAX INDIA LIMITED
Founded in 1985, Max India Limited is a Public Limited company listed in the NSE
and BSE of India with over 37,000 shareholders.
Today, Max India Limited is a multi-business corporate, driven by the spirit of
Enterprise, focused on Knowledge, People and Service oriented businesses of:
Healthcare (Max Healthcare)
Life Insurance (Max New York Life Insurance)
Clinical Research (Neeman Medical International)
Max also maintains interests in:
Specialty Plastic Products for the packaging industry (Max Specialty
Products)
Healthcare Staffing (Max Health Staff)
Prominent shareholders are Mr. Analjit Singh and a leading private equity firm,
Warburg Pincus that accounts for 28.7% of the total shareholding. The public and
Institutional Investors hold the balance shareholding.
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Till 1999, the companys main interests and partnerships were the following:
Business Partners
Bulk Active Pharmaceuticals DSM Gist Brocades
Electronic Component Distribution Motorola, USA
Electronic Component Distribution Avnet Inc., USA
Mobile Telephony Hutchison Telecom Ltd.
Hong Kong
V-SAT Communications Comsat Investment Inc.,
USA & Lockheed Martin,
USA
Plating Chemicals Atotech, Germany
Information Technology Mind Crossing, USA
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In 2000, the Company reinvented and restructured itself to focus on the businesses of
Life under the theme, LifeOur Focus.
Max New York Life Insurance, founded as a Joint Venture between Max India
Limited and New York Life, a Fortune 100 company, is one of the leading private life
insurers in India.
Max Healthcare, a subsidiary of Max India Limited is Indias first provider of
comprehensive, standardized, seamless, and integrated world-class healthcare
services.
Neeman Medical International (NMI) is an International Clinical Research provider
operating across three locations spanning North America, Asia and Latin America.
Each location is backed by comprehensive infrastructure and highly skilled and
experienced personnel.
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Board of Directors- Max India Limited
Dr Bhai Mohan Singh Lifetime Chairman Emeritus, Max India
Mr. Analjit Singh Chairman, Max India
Dr S S Baijal Former Chairman, ICI Ltd.
Mr. N C Singhal Former Vice Chairman & MD, SCICI
Mr. N Rangachary Former Chairman, IRDA
Mr. Nitin Sibal Vice President, Warburg Pincus India Pvt. Ltd.
Mr. Piyush Mankad Former Secy., Ministry of Finance, Govt. of India
Mr. Ashwani Windlass Former Managing Director, Hutchison Max
Mr. Bharat Sahgal Managing Director, Warburg Pincus India Pvt. Ltd.
Mr. B Anantharaman Jt. Managing Director, Max India
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Vision of MNYL
To become the most admired life insurance Company in India.
This we hope to achieve by:
o Understanding the needs of customer and offering them superior
products and services.
o Leveraging technology to service customers quickly, efficiently and
conveniently.
o Providing an enabling environment to foster growth and learning for
our employees.
o And above all, building transparency in all our dealings.
We do believe that we are on the threshold of an exciting new opportunity, where we
can play a significant role in redefining and reshaping the sector. Given the quality of
our parentage and the commitment of our team, there are no limits to our growth.
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MISSION OF MNYL
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.
VALUES OF MNYL
This vision to become India's most admired life insurance company will be realized
through our unique set of values, which are as follows:
Knowledge
Knowledge leads to expertise; and our expertise is in helping people protect them.
Perfectly combining global expertise with local knowledge, we are India's life
insurance specialist. Max New York Life believes that for knowledge to be of value it
must be focused, current, tested and shared.
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Caring
Max New York Life is redefining the life insurance paradigm by focusing
on customers first. The service process is responsive, personalized, humane and
empathetic. Every individual who represents the company is for us our brand
champion.
Honesty
Honesty is the heart of the life insurance business. It is all about trust. Transparency,
integrity and dependability form the cornerstones of the Max New York Life
experience. The company ensures that everyone who represents the brand carries a
promise: we care in word as well as deed.
Excellence
Excellence at Max New York Life implies the ability to perform at a consistently high
level. Focused on the value of continuous improvement in people, processes and the
organization, the company strives for the highest standards of quality in every aspect
of its business.
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RESEARCH
METHODOLOGY
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OBJECTIVE OF THE STUDY
The Objective of the study was to get an understanding of the life insurance segment
of the insurance industry. The Scope of the study involves
Measuring the impact of the aviva life insurance company in the Indian market
and on Indian consumers.
Figure out the prospects of the aviva and max new life insurance in the Life
insurance market.
Familiarizing oneself with various products available and the additional
features or the riders attached to them.
Analyzing the schemes offered by the private sector players.
Comparison of the aviva life insurance and max newyork life insurance in the
insurance market.
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RESEARCH METHODOLOGY
We have conducted our research taking into consideration only 5 private players
existing in the market namely AVIVA LIFE INSURANCE and MAX NEW YORK
LIFE INSURANCE. On the basis of their performance we have drawn conclusions
for the whole sector.
The information for the project of finance on life insurance industry has been
collected from both primary as well as secondary sources.
In case of primary sources the information was retrieved directly from the concerned
people and the authorities. We have conducted our research mainly with the help of
the invaluable inputs provided by the consumers of products of the private players in
the form of a questionnaire drafted by us. The questionnaire method was used as it is
more versatile than any other method and further a questionnaire is pre planned and
thus less time is wasted since a planned set of questions are available. We have taken
a sample size of 200 people. Our analysis is completely based on the responses given
to us by the respondents and the result for the same has been presented in the form of
pie charts and graphs. While there was some information, which could not be
obtained through questionnaires, for that purpose we resort to personal interviews. A
total of six In depth interviews were also taken of the agents and managers of these
private players.
Since secondary data are information published by others and the companies they
were easily available and not much effort was required in obtaining the information.
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SOURCES OF DATA
PRIMARY DATA
Questionnaires.
In depth interviews with the agents and managers of private life insurance
companies.
SECONDARY SOURCES
Newspapers.
Magazines.
Internet sites.
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DATA COLLECTION
PRIMARY DATA
The primary data are those data which are collected afresh and for the first time and
happen to be original in character. The primary data to be collected for the study are-
By Structured Questionnaire (Customer)
SECONDARY DATA
Secondary data are those data which have already been collected by someone else and
which already had been passed through the statically process. The secondary data to
be collected for the study are-
Publication of the company
Periodical of the company
By Internet Websites
RESEARCH INSTRUMENT
STRUCTURED QUESTIONNAIRE:
A Questionnaire consist of a number of questions printed or typed n a definite order
on a form or set of forms. It is the set of questions presented to the retailers for their
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answers. When the questions have only two alternatives or of multiple choice, then it
is known as closed-end questionnaire, which is hence used the given study.
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DATA ANALYSIS
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ANALYSIS OF THE MARKET
FINDINGS
It may be noted that the pie charts and bar diagrams have been drawn on the basis of
the total number of questionnaires filled i.e. 200 and on the basis of the number of
responses we have received for each question. The interpretation for the same has
been done in percentage form.
1. Thinking of insurance, what comes to your mind?
50%
30%
20%
INSURANCE MEANS
LIC
SECURITY
TAX SA VING
Majority of the population(50%), when they think of insurance it means LIC where as
20% & 30% of the population think it as tax saving and security respectively. Thus it
can be seen that LIC is well based in the minds of the people.
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2. Out of the following, you have an insurance policy of (put tick
mark)
AVIVA [ ] NEW YORK MAXLIFE [ ]
Others, specify
60%
40%
Aviva Max New york
Major part of the population has their insurance policy in Aviva. And max new York
have less business than aviva.
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3. What type of policy do you have?
TYPES OF POLICIES PEOPLE HAVE
20 20
1214
28
0
5
10
15
20
25
30
POLICIES
No.OFPEOPLE
ENDOWMENT
WHOLE LIFE
MONEY BACK
SINGLE PREMIUM
TERM POLICY
Most of the people have term policies; endowment and whole life are on the same
platform. Money back and single premium are less desirable by the people.
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4. What do you look for, while opting for a Life Insurance Company?
24%
33%
9%
34%
PEOPLE LOOK FOR WHILE OPTING FOR LIFE
INSURANCE COMPANY
RETURN ON
INVESTMENT
GOODWILL
ADDITIONAL
BENEFITS
SECURITY
When people opt for a Life Insurance Company, most of them look for security of
their money, goodwill of the company and return on their investment. Not many of
them look for additional benefits.
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5. What do you look for, while opting for a Life Insurance policy?
31%
22%
24%
23%
PEOPLE LOOK FOR WHILE OPTING FOR LIFEINSURANCE POLICY
TAX SAVING
INCOME SECURITY
OLD AGE BENEFITS
SAVINGS
In India most of people take insurance policy because it gives them tax benefits. It
plays a major role. Others such as income security, savings and old age benefits go
behind it.
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6. Do you think insurance is superior to other forms of savings?
84%
16%
INSURANCE SUPERIOR TO OTHERFORM OF SAVINGS
YES
NO
Majority of the population believe that insurance is superior to other form of savings.
It provides tax benefits which is not provided in other forms of savings and to the
more it provides security for the future.
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7. Is price an important consideration while opting for an insurance
policy?
74%
26%
PRICE IS AN IMPORTANT CONSIDERATION
YES
NO
Most of the people when they opt for an insurance policy, price is an important
consideration for them. However, about 26% of the population do not consider price
as an important consideration while opting for an insurance policy.
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CONCLUSION
&
RECOMMENDATIONS
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Consumers today also seek products that offering flexible options, preferring products
with benefits unbundled and customizable to suit their diverse needs.
The trend in developed economies where people not only live longer and retire earlier
is now emerging in India. With the breakdown of traditional forms of social security
like the joint family system, consumers are now concerning themselves with the need
to provide for a comfortable retirement.
This trend has been further driven by the long-term decline in interest rates, which
makes it all the more necessary to start saving early to ensure long term wealth
creation. Today's consumers are increasingly interested in products to help build
wealth and provide for retirement income.
This all adds up to major change in demand for insurance products. Firms will need to
constantly innovate in terms of product development to meet ever-changing consumer
needs.
Competition will result in the market to grow beyond current rates and offer
additional consumer choice through the introduction of new products, services and
price options. With the heightened awareness and consumer education comes a
willingness to view life insurance as an integral part of the financial portfolio. No
longer is life insurance a poorly understood product that is pushed onto people. Nor is
it a product that is only to be bought hurriedly at the time of filing taxes. It's now
catching on as an important element that is purchased to fulfill specific rational and
emotional needs and has clear benefits and advisors are being trained to sell insurance
as a solution to meet these needs.
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To conclude with we would just like to say that in the Indian life insurance market is
aviva life insurance have a good market position quite a big one and more importantly
a huge part of it has been left untapped till now, therefore there is enough room for all
the private players to establish themselves provided they give the Indian consumer the
best value for their money in the long run because it will take time for the people to
get out of the nutshell of being getting insured only with LIC as till few years ago it
used to have an absolute monopoly in this market.
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LIMITATIONS
As per my experience at Aviva insurance what I got to know is:
Out of l00% tele-calling only l0% agrees and 2% gets converted that too
by approaching the customers again and again and time allotted to us was limited as it
even takes three to four months or may be more to get one call converted.
We have me limited geographical coverage area i.e. confined to only
meerut because clients are also there m other cities.
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RECOMMENDATIONS
Need to create and effectively deploy differentiated strategies in sales,
distribution and marketing.
Right customer identification and thus segmentation which need to be
appropriate.
Design and manage sales force, which yields high performance. Training of
the employees can be done so that they produce best results.
Need to create better, differentiated and detailed brochures.
Increase its agent sales force quantity as well as quality.
Target the rural population which is one of the biggest untapped area.
Less harassing documentation w.r.t insurability and claims.
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General some innovative and alternative channels of distribution, using the sources
that can straight play with the emotions of the person and influence so high that it
forces the being to go for insurance and that too willingly
ANNEXURE
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QUESTIONNAIRE
Dear Sir/Madam,
I am conducting a survey to measure the prospects of private insurers
in life insurance business. I like to include your opinion in this survey. I request you
to answers the following questions.
1. Thinking of insurance, what comes to your mind?
2. Out of the following, you have an insurance policy of (put tick mark)
AVIVA [ ] NEW YORK MAXLIFE [ ]
Others, specify
3. What type of policy do you have? (Put tick mark)
Endowment [ ] Money Back[ ] Term Policy [ ]
Whole Life [ ] Single Premium [ ]
Other, specify..
4. What do you look for, while opting for a Life Insurance Company? (Put
tick mark)
Return on Investment [ ] Goodwill [ ]
Additional Benefits [ ] Security [ ]
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Others, specify
5. What do you look for, while opting for a Life Insurance policy?
Tax Saving [ ] Income
Security [ ]
Old Age Benefits [ ] Savings [ ]
Other, specify.
6. Do you think insurance is superior to other forms of savings?
Yes [ ] No[ ]
7. Is price an important consideration while opting for an insurance policy?
Yes [ ] No[ ]
8. At any point of policy period, have you ever claimed your policy?
Yes [ ] No [ ]
9. Have you ever insured with aviva?
Yes [ ] No[ ]
10. Any particular reason for opting out of the aviva?
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Yes[ ] No[ ]
If yes, why?
11. Which private Life Insurance Company advertisement is more
informative? (put tick mark)
12. Any suggestions to improve the services offered by various insurers?
Parameters Excellent Very
Good
Goo
d
Average Poor
AVIVA
New York
MaxLife
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BIBLIOGRAPHY
Beri G.C., Marketing Research, Tata McGraw Hill Publishing Co. LTD., New
Delhi, Third Edition (2002)
Saxana Rajan, Marketing Management, Tata McGraw Hill Publishing Co.
LTD, New Delhi, Second Edition (2001)
Saxena R.S., Marketing Management, Himalaya Publication, New Delhi,
Ninth Edition (2000)
Kotlar Philip, Marketing Management, Pren Tice-hall of India PVT. LTD.,
New Delhi, Ninth Edition (2002)
Bhandari, Research Methodology, Print 2004, Second edition
www.avivaindia.com
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