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Transcript of Dilip Singh Chouhan Project Report
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1
A PROJECT REPORT
ON
RELIANCE LIFE INSURANCE
company
Submitted in partial fulfillment of the requirement of Masters degree
Submitted By:-
Dilip Singh Chouhan
Session 2010-2011
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ACKNOWLEDGEMENT
First things first, I would like to thank God who
showered blessings on me all the way while I was
working on this report.
It was really great to have worked with RELIANCE LIFE
INSURANCE COMPANY. I thank her for providing me
with an opportunity to work with the organization,
providing me a personal exposure to the functioning of
the organization.
I express my deep sense of gratitude to my parents,
relatives and friends for making available their valuable
suggestions from time to time.
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CERTIFICATE
This is to certify that Mr. Dilip Singh Chouhan has
proceeded under by supervision his/her Research Project
Report on RELIANCE LIFE INSURANCE
The work embodied in this report is original and is of the
standard expected of an Masters degree student and has
not been submitted in part or full to this or any other
university for the award of any degree diploma. He has
completed all requirements of guidelines for project
report and the work is fit for evaluation.
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EXECUTIVE SUMMARY
Anil Dhirubhai Ambani Group (ADAG) announces the acquisition of
100 percent shareholding in AMP Sanmar Life Insurance Company
Limited. Reliance Life Insurance Company Limited is officially
launched on February 1, 2006. This was after obtaining the required
regulatory approvals from the Registrar of Companies and the
Insurance Regulatory and Development Authority. Reliance Life
Insurance is the part of the Reliance Capital. Reliance Life Insurance
has plenty of plans on the anvil. It has also 118 branches, with strong
presence in South and a bouquet of products catering savings
protection and investment need of individuals and corporate. The
head-office of it is at Chennai. The company has already added 600
employees in addition to the 1000 plus staff of the erstwhile AMP
Sanmar Life Insurance Company Limited. Reliance Life Insurance
aims to be the consumers preferred life insurer by understanding and
meeting his needs.
Think Bigger, Think Better!
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INDEX
CHAPTER NO SUBJECT PAGE NO.
1. INSURANCE INDUSTRY 62. INTRODUCTION TO THE 28
COMPANY
3. PRODUCT MIX 38
4. HUMAN RESOURCE MANAGEMENT 52
5. MARKETING DEPARTMENT 60
6. RESEARCH METHODOLOGY 73
7. FINANCE DEPARTMENT 90
8. CONCLUSION 93
9. BIBLIOGRAPHY AND REFRENCES 94
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CHAPTER 1 INSURANCE INDUSTRY
MEANING OF INSURANCE
Insurance may be described as a social device to reduce or eliminate
risk of loss to life and property. Insurance is a collective bearing of
risk. Insurance is a financial device to spread the risks and losses of
few people among a large number of people, as people prefer small
fixed liability instead of big uncertain and changing liability.
Insurance can be defined as a legal contract between two parties
whereby one party called insurer undertakes to pay a fixed amount of
money on the happening of a particular event, which may be certain or
uncertain. The other party called insured pays in exchange a fixed
sum known as premium. Insurance is desired to safeguard oneself and
ones family against possible losses on account of risks and perils. It
provides financial compensation forth losses suffered due to the
happening of any unforeseen events.
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IMPORTANCE OF INSURANCEInsurance constitutes one of the major segments of the financial
market.
Insurance services play predominant role in the process of financial
Intermediary. Today insurance industry is one of the most growing
sectors in India. There is lot of potential in the Indian Insurance
Industry.
There are many issues, which require study. The scope of the study of
insurance industry of India would be very great as there are ongoing
developments in the industry after the opening of the sector.
The major issue right now is the hike in FDI (Foreign Direct
Investment)
limit from 26% to 49% in the insurance sector. Government may in
near future allow 49% FDI in Insurance. This would lead to more
capital inflow by foreign partners.
Another major issue is the effects on LIC after the entry of private
players in the market. Though market share of LIC has been affected,
it has improved in terms of efficiency. There are number of other hot
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topics like penetration of Health Insurance, Rural marketing of
insurance, new distribution channels, new product ranges, insurance
brokers regulation, incentive scheme of development officers of LIC
etc. So it offers lot of scope for studying the insurance industry.
Right now the insurance industry has great opportunities in a country
like India or China which huge population. Also the penetration of
insurance in India is very low in both life and non-life segment so
there is lot potential to be tapped. Before starting the discussion on
insurance industry and related issues, we have to start with the basics
of insurance. So first we understand what is insurance? How the
wordinsuranceis different from the wordassurance? Etc.
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DIFFERENCE BEETWEN INSURANCE
AND ASSURANCE
Assurance is older in history and it was used to describe all types of
insurances. From 1826, the term assurance came to be used only for
the risks covered by life insurance and the term insurance was
exclusively used to denote the risks covered by marine, fire, etc.The
word assurance indicated certainty. In life insurance, there is an
assurance from the insurance company to make payment under the
policy either on the maturity or at earlier death. On the other hand the
word insurance was used to denote indemnity type of insurances
where the insurance company was liable to pay only in case of the loss
damage the property.
The insured event was bound to happen sooner or later under
assurance but the event insured against may or may not happen under
insurance. The principle of indemnity applies to insurance
contracts(non-life) only. The scope of the word, insurance is wider.
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PRINCIPLES OF INSURANCE An insurance contract is based on some basic principles of insurance.
(1) Principle of Uberrima Fides or Principle of utmost good
Faith -It means maximum truth. Both the parties should disclose all
material information regarding the subject matter of insurance.
(2) Principle of indemnity-This means that if the insured suffers a
loss against which the policy has been made, he shall be fully
indemnified only to the extent of loss. In other words, the insured is
not entitled to make a profit on his loss.
(3) Principle of subrogation-This means the insurer has the right to
stand in the place of the insured after settlement of claims in so far as
the insureds right of recovery from an alternative source is involved.
The insurer before the settlement of the claim may exercise the right.
In other words, the insurer is entitled to recover from a negligent third
party any loss payments made to the insured. The purposes of
subrogation are to hold the negligent person responsible for the loss
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and prevent the insured from collecting twice for the same loss. The
concept of Third Party Claims is based on the same principle.
(4) Principle of causa proxima-The cause of loss must be direct and
an insured one in order to claim of compensation.
(5) Principle of insurable interest-The assured must have insurance
interest in the life or property insured. Insurable interest is that interest
which considerably alters the position of the assured in the event of
loss taking place and if the event does not take placed, he remains in
the same old position.
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HISTORY OF INSURANCE
The concept of insurance is believed to have emerged almost 4500
years ago in the ancient land of Babylonia where traders used to bear
risk of the carvan by giving loans, which were later repaid with
interest when the goodsarrived safely.The concept of insurance as we
know today took shape in 1688 at a placecalled Lloyds Coffee House
in London where risk bearers used to meet to transact business. This
coffee house became so popular that Lloyds became the one of the
first modern insurance companies by the end of the eighteenthcentury.
Marine insurance companies came into existence by the end of the
eighteenth century. These companies were empowered to write fire
and life insurance as well as marine. The Great Fire of London in 1966
caused huge loss of property and life. With a view to providing fire
insurance facilities, Dr. Nicholas Barbon set up in 1967 the first fire
insurance company known as the Fire office. The early history of
insurance in India can be traced back to the Vedas. The Sanskrit term
Yogakshema (meaning well being), the name of Life Insurance
Corporation of Indias corporate headquarters, is found in the Rig
Veda. The Aryans practiced some form of community insurance
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around 1000 BC.
Life insurance in its modern form came to India from England in
1818. The Oriental Life Insurance Company was the first insurance
company to be setup in India to help the widows of European
community. The insurance companies, which came into existence
between 1818 and 1869, treated Indian lives as subnormal and charged
an extra premium of 15 to 20 per cent. The first Indian insurance
company, the Bombay Mutual Life Assurance Society, came into
existence in 1870 to cover Indian lives at normal rates. The Insurance
Act, 1938, the first comprehensive legislation governing both life and
non-life branches of insurance were enacted to provide strict state
control over insurance business..
By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers,
and75 provident societies carrying on life insurance business in India.
Insurance business flourished and so did scams, irregularities and
dubious investment practices by scores of companies. As a result the
government decided to nationalize the life assurance business in India.
The Life Insurance Corporation of India (LIC) was set up in 1956.
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TIME LINE IN INSURANCE HISTORY (MAJOR
LANDMARKS1818-British introduced the life insurance to India with the
establishment of the Oriental Life Insurance Company in Calcutta.
1850-Non life insurance started with Triton Insurance Company.
1870-Bombay Mutual Life Assurance Society is the first India owned
life insurer.
1912-The Indian Life Assurance Company Act enacted to regulate the
life insurance business.
1938-The Insurance Act was enacted.
1956- Nationalization took place. Government took over 245 Indian
and foreign insurers and provident societies.
1972- Non-life business nationalized, General Insurance
Corporation (GIC) came into being.
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1993-Malhotra committee was constituted under the chairmanship of
former RBI chief R. N. Malhotra to draw a blue print for insurance
sector reforms.
1994-Malhotra committee recommended reentry of private players.
1997-IRDA (Insurance Regulatory and Development
Authority) was set up as a regulator of the insurance market in
India.
2000-IRDA started giving license to private insurers. ICICI
Prudential, HDFC were first private players to sell Insurance Policies.
2001- Royal Sundaram was the first non-life private player to sell an
insurance policy.
2002 - Bank allowed selling insurance plans as TPAs enter the scene,
insurers start setting non-life claims in the cashless mode.
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MEANING OF LIFE INSURANCE
There are three parties in a life insurance transaction: the insurer, the
insured, and the owner of the policy (policyholder), although the
owner and the insured are often the same person. Another important
person involved in a life insurance policy is the beneficiary. The
beneficiary is the person or persons who will receive the policy
proceeds upon the death of the insured. Life insurance may be divided
into two basic classes term and permanent.
Term life insurance provides for life insurance coverage for a
specified term of years for a specified premium. The policy does not
accumulate cash value.
Permanent life insurance is life insurance that remains in force until
The policy matures, unless the owner fails to pay the premium when
due.
Whole life insurance provides for a level premium, and a cash value
table included in the policy guaranteed by the company. The primary
advantages of whole life are guaranteed death benefits; guaranteed
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cash values, fixed and known annual premiums, and mortality and
expense charges will not reduce the cash value shown in the policy.
Universal life insurance (UL) is a relatively new insurance product
intended to provide permanent insurance coverage with greater
flexibility in premium payment and the potential for a higher internal
rate of return. A universal life policy includes a cash account.
Premiums increase the cash account. If you want insurance protection
only, and not a savings and investment product, buy a term life
insurance policy. If you want to buy a whole life, universal life, or
other cash value policy, plan to hold it for at least 15 years. Canceling
these policies after only a few years can more than double your life
insurance costs. Check the National Association of Insurance
Commissioners website (www.naic.org/cis) or your local library for
information on the financial soundness of insurance companies.
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HISTORY OF LIFE INSURANCE
Risk protection has been a primary goal of humans and institutions
throughout history. Protecting against risk is what insurance is all
about.
Over 5000 years ago, in China, insurance was seen as a preventative
measure against piracy on the sea. Piracy, in fact, was so prevalent,
that as a way of spreading the risk, a number of ships would carry a
portion of another ship's cargo so that if one ship was captured, the
entire shipment would not be lost. In another part of the world, nearly
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. It formalized concepts
of bottomry referring to vessel bottoms and respondentia referring
to cargo. These provided the underpinning for marine insurance
contracts. Such contracts contained three elements: a loan on the
vessel, cargo, or freight; an interest rate; and a surcharge to cover the
possibility of loss. In effect, ship owners were the insured and lenders
were the underwriters.
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Life insurance came about a little later in ancient Rome, where burial
clubs were formed to cover the funeral expenses of its members, as
well as help survivors monetarily. With Rome's fall, around 450 A.D.,
most of the concepts of insurance were abandoned, but aspects of it
did continue through the Middle Ages, particularly with merchant and
artisan guilds. These provided forms of member insurance covering
risks like fire, flood, theft, disability, death, and even imprisonment.
During the feudal period, early forms of insurance ebbed with the
decline of travel and long-distance trade. But during the 14th to 16th
centuries, transportation, commerce, and insurance would again
reemerge.
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. And similar to ancient Rome,
burial societies were formed in the Buddhist period to help families
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build houses, and to protect widows and children.
Modern Insurance
Illegal almost everywhere else in Europe, life insurance in England
was vigorously promoted in the three decades following the Glorious
Revolution of 1688. The type of insurance we see today owes its roots
to 17th century England. Lloyd's of London, or as they were known
then, Lloyd's Coffee House, was the location where merchants, ship
owners and underwriters met to discuss and transact business deals.
While serving as a means of risk-avoidance, life insurance also
appealed strongly to the gambling instincts of England's burgeoning
middle class. Gambling was so rampant, in fact, that when newspapers
published names of prominent people who were seriously ill, bets
were placed at Lloyds on their anticipated dates of death. Reacting
against such practices, 79 merchant underwriters broke away in 1769
and two years later formed a New Lloyds Coffee House that
became known as the real Lloyds. Making wagers on people's
deaths ceased in 1774 when parliament forbade the practice.
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Insurance moves to America
The U.S. insurance industry was built on the British model. The year
1735 saw the birth of the first insurance company in the American
colonies in Charleston, SC. The Presbyterian Synod of Philadelphia in
1759, sponsored the first life insurance corporation in America for the
benefit of ministers and their dependents. And the first life insurance
policy for the general public in the United States was issued, in
Philadelphia, on May 22, 1761. But it wasn't until 80 years later (after
1840), that life insurance really took off in a big way. The key to its
success was reducing the opposition from religious groups.
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. With the creation of the automobile, public liability
insurance, which first made its appearance in the 1880s, gained
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importance and acceptance? More advancement was made to
insurance during the process of industrialization. In 1897, the British
government passed the Workmen Compensation Act, which made it
mandatory for a company to insure its employees against industrial
accidents.
During 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 labor
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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Final Thoughts
Even though the American insurance industry was greatly influenced
by
Britain, the US market developed somewhat differently from that of
the
United Kingdom. Contributing to that was America's size; land
diversity and the overwhelming desire to be independent. As America
moved from colonial outpost to an independent force, from a farming
country to an industrial nation, the insurance business developed from
a small number of companies to a large industry. Insurance became
more sophisticated, offering new types of coverage and diversified
services for an increasingly complex country.
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KEY FEATURES OF LIFE INSURANCE
1) Nomination: - When one makes a nomination, as the policyholder
you continue to be the owner of the policy and the nominee does not
have any right under the policy so long as you are alive. The nominee
has only the right to receive the policy monies in case of your death
within the term of the policy.
2) Assignment: - If your intention is that your policy monies should
go only to a particular person, you need to assign the policy in favor of
that person.
3) Death Benefit: - The primary feature of a life insurance policy is
the death benefit it provides. Permanent policies provide a death
benefit that is guaranteed for the life of the insured, provided the
premiums have been paid and the policy has not been surrendered.
4) Cash Value: - The cash value of a permanent life insurance policy
is accumulated throughout the life of the policy. It equals the amount a
policy owner would receive, after any applicable surrender charges, if
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the policy were surrendered before the insured's death.
5) Dividends: - Many life insurance companies issue life insurance
policies that entitle the policy owner to share in the company's
divisible surplus.
6) Paid-Up Additions: - Dividends paid to a policy owner of a
participating policy can be used in numerous ways, one of which is
toward the purchase of additional coverage, called paid-up additions.
7) Policy Loans: - Some life insurance policies allow a policy owner
to apply for a loan against the value of their policy. Either a fixed or
variable rate of interest is charged. This feature allows the policy
owner an easily accessible loan in times of need or opportunity.
8) Conversion from Term to Permanent: - When in need of
temporary protection, individuals often purchase term life insurance. If
one owns a term policy, sometimes a provision is available that will
allow her to convert her policy to a permanent one without providing
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additional proof of insurability.
9) Disability W
aiver of Premium:-Waiver of Premium is an option
or benefit that can be attached to a life insurance policy at an
additional cost. It guarantees that coverage will stay in force and
continue to grow.
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BENEFITS OF LIFE INSURANCE
1) Risk cover: - Life Insurance contracts allow an individual to have
a risk cover against any unfortunate event of the future.
2) Tax Deduction: - Under section 80C of the Income Tax Act of
1961 one can get tax deduction on premiums up to one lakh rupees.
Life Insurance policies thus decrease the total taxable income of an
individual.
3) Retirement Planning: - What had provided protection against the
financial consequences of premature death may now be used to help
them enjoy their retirement years. Moreover the cash value can be
used as an additional income in the old age.
4) Educational Needs: - Similar to retirement planning the cash
values that flow from ones life insurance schemes can be utilized for
educational needs of the insurer or his children.
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CHAPTER 2 - INTRODUCTION TO THE COMPANY
ABOUT RELIANCE LIFE INSURANCE
` Reliance Life Insurance Company Limited is a part of Reliance
Capital Ltd.of the Reliance - Anil Dhirubhai Ambani Group. Reliance
Capital is one of Indias leading private sector financial services
companies, and ranks among the top 3 private sector financial services
and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life
and general insurance, proprietary investments, private equity and
other activities in financial services Reliance Capital Limited (RCL) is
a Non-Banking Financial Company (NBFC) registered with the
Reserve Bank of India under section 45-IA of the Reserve Bank of
India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing
financial services sector in India and aims to become a dominant
player in this industry and offer fully integrated financial services.
Reliance Life Insurance is another step forward for Reliance Capital
Limited to offer need based Life Insurance solutions to individuals and
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Corporate.
HISTORY
Reliance Capital Limited announced the launch of its life insurance
business on February 1, 2006. This was after obtaining the required
regulatory approvals from the Registrar Of Companies and the
Insurance Regulatory and Development Authority.
It was in August 2005 that the ball was set rolling when Reliance
Capital Limited, the financial arm of Reliance Anil Dhirubhai
Ambani Group (ADAG) announced the requisition of 100%
shareholding in AMP Sanmar Life Insurance Company Limited; and
the formal transfer of shares took place in October 2005. The company
will issue all policy contracts under the Reliance Life Insurance
Company limited name. All the existing policy contracts also stand
transferred to the Reliance Life Insurance entity with all the original
contractual terms and commitments intact.
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2.3 JOURNEY SO FAR
2005August: Anil Dhirubhai Ambani Group (ADAG) announces
the acquisition of 100 percent shareholding in AMP Sanmar Life
Insurance Co Ltd.
2006 January 17: Mr. Nandgopal participates in a one-day
conference onOptimising growth opportunities through Distribution
Matrix: Emerging Banc assurance organized by the Asia Insurance
Post at the Taj President, Mumbai.
February 1: Reliance Life Insurance officially launched.
February 16, 17, 18: Strategy meet at the Reliance Management
Institute. Amongst those who participate are the CEO, COO,
Functional Heads, Regional Managers and Regional Sales Managers.
February 26: A Puja held at the Church gate office situated in
Express Building, 4 Floor, 14 E Road, Mumbai.
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March 1: Church gate office inaugurated by Mr. Amitabh
Jhunjhunwala, Mr. Amitabh Chaturvedi and Mr. Nandgopal.
March 6: Shifting to the new premises at Church gate commences.
March 7: The new office at Chennai, at the Trapezium, First Floor,
#39, Nelson Manickam Road, inaugurated by their CEO Mr.
Nandgopal, Mr. KV Srinivasan and Mr. Sureshbabu also graced the
occasion.
ROLE OF IT AT RELIANCE LIFEINSURANCE
1) World Class DataCentre:
They plan to establish a Primary Data Centre at Navi Mumbai
(Dhirubhai Ambani Knowledge City) which will cater to their
company
needs across India, with fail-over capability to their Chennai Data
Centre
within the same business day in occurance if an incident or Disaster
happens.
2) Inter Office Connectivity: -
All their Branch / Area and Regionaloffices will be
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interconnected to their Data Centre with a 24x7 access to Core
Applications like Lotus Mail, Life-Asia and Internet Applications.
This
will enable their associates to work faster and better with high-speed
Internet connectivity and also ensure faster Turn around Time for their
customers.
3) Customer Care Centre: -
They will host a centralized Customer Care Centre at Dhirubhai
Ambani Knowledge City at Navi Mumbai, which cater services to
internal and external queries and complications. A customer
Relationship Management Tool (CRM) and Lead Management
System
(LMS) are in progress.
4) Web Portal: -
This portal will be an interface between both internal employees
and their external users. Some of the functions included in their portal
are Policy Tracking Systems, Corporate News, Quality Checking
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System, Under Writing Medical System, and Agent Management
System etc.
5) R World: -
Reliance Mobile R-World will provide online information about
their Company, Products, and Policy Services to their existing
customers, Agents/Advisors and Lead Generators.
6) SMS Alerts: -
SMS Alerts will be provided to their Sales Managers about the
latest happenings like Contests and Campaigns, Employee Alerts will
include Company News and Welcome/Birthday/Anniversary message
etc. Customer Alerts will include Welcome/Birthday/Anniversary
message, Policy Dispatch Details, Policy Servicing SMS like Premium
Receipt and Renewal Premium reminders etc.
7) Life and Group Asia: -
Single Life and Group Life details will be captured and managed
by Life and Group Asia. A common middleware between these
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applications will enable Group Life Customers to view their individual
Single Life Insurance Plan details taken with Reliance Life Insurance
and vice versa.
8) Advisor Lounge: -
It is a dedicated area for Reliance Life Insurance Agents/Advisors
in all the branches across India. This Lounge will be equipped with
desktops and printers with Internet connectivity, where their Advisors
can bring in the prospects and can have discussions acros s the table
and they can create and print quotes. The Agents/Advisors can use this
area to service their existing customers DMS will enable both policy
issuance and contract servicing through an automated workflow,
which yields a faster turnaround Time to both internal and external
users. This application will enable them to have a paperless office and
thus mitigate the risk of losing vital records/papers.
10) Wireless Data Access: -
This will enable identified Top Sales Managers and Top Advisors
to access real time data for both LMS and CRM on the fly through
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Handheld PDA device.
11) SAP ERP Modules:
SAP (Finance and HR Modules), will automate the Expense,
Travel and Leave Management Systems.
2.5 MISSION
The mission of Reliance Life Insurance Company Limited is to be the
best in every sphere- business results, customer care and employee
focus. The aim of the company is to Think Bigger and Think Better.
2.6 CORE VALUES
Reliance Life Insurance Company Limited has some core values
which are listed as follows:
9) Document Management System: -1) Result Oriented
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2) Performance Driven
3) Customer Focused
4) Learning and Development Oriented
5) Employee Centric
6) Informal and Fun
2.7 FUTURE PLANS
Forty-four new branches to be opened across the country in the
coming months; and a pan India presence with 162 branches in the
coming year.
A state-of-the-art customer care centre will provide continuous,
Responsive services to the caller and promptly address queries, collate
feedback and suggestions from the caller, who may be both
Prospective and existing clientele and from channel partners in
Chennai and Mumbai. It will be launching additional products aimed
at providing unparalleled service to its valued clientele.
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2.8 HEAD OFFICE
Reliance Life Insurance Company Limited,
The Trapezium,
39, First Floor,
Nelson Manickam Road,
Chennai 600 029.
2.9 BRANCHES
They have so many branches and substations in the India. They have
around 160 branches in the India. And they have planned to open more
branches across the country in the coming months.
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CHAPTER NO. 3- PRODUCT MIX
TRADITIONAL PLAN:-
Life insurance products are designed to suit the requirements of
customers. Fundamentally the product provide for:
Risk cover
Investment
Health cover
In every product, to a certain degree, risk cover is imperative for
it to fall under the category of insurance. Based on the coverage of the
Product, the premiums are calculated and the customer pays
accordingly. In order to suggest the right product, it is essential for an
agent to understand the requirements of the customer well. Reliance
Life Insurance Company Limited has offered 8 traditional plans to the
customers, which are listed as follows:
1) Reliance Term Plan
2) Reliance Whole Life Plan
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3) Reliance Child Plan
4) Reliance Endowment Plan
5) Reliance Special Endowment Plan
6) Reliance Cash Flow Plan
7) Reliance Credit Guardian Plan
8) Reliance Special Credit Guardian Plan
Each of the above traditional plans is discussed as follows:
1) Reliance Term plan: -
This insurance policy is designed for those who only want life cover
for the protection of their family, and do not wish to save for
themselves. It can also be useful to business firms that wish to provide
financial security to their business against the sudden loss of partners
or valuable manpower. Since there is no saving element or bonus
provision, the premium is very low. Hence, this is a high-risk plan
with a low premium.
Features: -
a) Purely a term plan
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b) Entry age minimum 18 years and maximum 65 year
c) Maximum premium paying term is 30 year
d) Loan facility N.A.
e) Maturity amount = Sum assured
2) Reliance Whole Life Plan: -
This insurance policy is designed for people who do not wish to avail
of any benefits themselves but wish to create an immediate estate to
protect their family by availing of insurance cover on their life at a
very low cost.
Features: -
a) It is a whole life insurance policy with profits
b) Low cost life cover
c) Maturity age is 85 year or 99 years last birthday as chosen
d) Maturity amount = Sum assured + Vested bonus
e) Tax benefit is available
3) Reliance Child Plan: -
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This insurance policy is designed for people who wish to save money
for a future time when there will be a recurring need for substantial
amounts of money. This is especially true when it comes to paying
large sums of money for higher education as and when your son or
daughter is studying to become an Engineer, a Doctor or specialize in
some other field, or is perhaps planning to go abroad. This money is
payable in equal installments over the last 4 years of the policy term.
Features: -
I. Minimum entry age is 20 year and maximum 60 year
a) Minimum sum assured is Rs. 25,000.
b) Minimum premium paying term is 5 year and maximum 20 year
c) Tax benefit is available
d) Maturity amount = Four equal installment of sum insured in last
four year plus vested bonus in the last year
e) Loan facility is available
4) Reliance Endowment Plan: -
Reliance Life Insurances Reliance Endowment Plan is the key to all
your financial needs. It is an inexpensive and easy way to protect you,
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your family or your business. In a nutshell this plan will keep you
financially prepared for all the special occasions in your life - your
daughters wedding, your childs university education or even a new
office for your business - by eliminating the burden that a shortage of
money creates. In the event of your untimely death, Reliance
Endowment Plan will also assist your loved ones through this difficult
time by the financial support that it provides. Reliance Endowment
Plan also gives you the additional benefit of participating in the
companys profits, which you will receive at the end of the policy
period.
Features: -
a) Entry age minimum is 5 year and maximum 65 year
b) Maturity age minimum is 18 year and maximum 75 year
c) Minimum premium paying term is 5 year and maximum 35 year in
case of regular and in case of single 15 year
d) Minimum sum assured is Rs. 25,000 or as determined by the
minimum premium
e) Maximum sum assured is Rs. 5, 00,000 (entry age below 18 years
and no limit for entry age 18 and above)
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f) Premium mode annual, half yearly, quarterly and monthly
(by salary deduction only)
g) Loan up to 90% of the surrender value of the policy
h) Maturity amount = Guaranteed sum assured + Reversionary bonus
5) Reliance Special Endowment Plan: -
This insurance policy is designed for people who wish to combine
savings with extended security. The unique feature of this policy is
that life protection continues for five years after you have stopped the
payment of premium. Payment of sum assured at the end of premium
paying term and extension of life cover thereafter for the full sum
assured for a period of 5 years, are characteristics of the policy.
This plan also participates in the profits.
Features: -
a) Entry age minimum 12 year and maximum 65 year
b) Minimum sum assured is Rs. 25,000
c) Minimum premium paying term is 10 year and maximum 40 year
d) Unique feature of this policy is that five year life protection
continues after you have stopped the payment of premium
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e) Tax benefit is available
f) Under this policy bonus is compounded yearly
g) Loan facility is available
h) Maturity amount = Full sum assured before maturity date + Vested
bonus at the time of maturity date
6) Reliance Cash Flow Plan: -
This insurance policy is designed for those who have a recurring need
for reinvestment in business or look for short-term investment
channels. The advantage of the policy is that they need not part with a
sizable amount of money at any one time, but create, through regular
premium payments, a periodic return of lump sums which become
available for reinvestment at higher returns, while providing
simultaneously, substantial life cover. Alternatively, it can be used to
meet any immediate financial crisis in the family like your son's
college admission, your daughter's engagement, and renovation of
your home or perhaps, a holiday abroad. The money is payable in
installments. The first installment is paid at the end of the 4th year and
thereafter at the end of every 3rd year.
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Features:-
a) Plan with profits
b) Minimum entry age is 15 year and maximum is 63 year
c) Maximum premium paying term is 34 year
d) Loan facility is not available
e) In case of death full sum assured + accrued bonuses up to the date
of death is payable immediately
f) In case of survival up to maturity date all premiums paid
g) Rider accident death and critical illness
h) Mode of payment is available
7) Reliance Credit Guardian Plan: -
This insurance policy is designed for those who not only safeguards
individuals but also families and businesses from the financial
hardship that could arise from unfortunate and unexpected death.
Features: -
a) Loan protection against home, home improvement, two wheelers
and four wheelers
b) In case of death remaining loan amount paid immediately
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c) In case of survival no benefit is available
d) Premium payment option for single and regular is available
e) Premium paying term is 2/3 of loan period and remaining period
paid by the company
8) Reliance Special Credit Guardian Plan: -
This insurance policy is designed for those who not only safeguards
individuals but also families and businesses from the financial
hardship that could arise from unfortunate and unexpected death,
disability or critical illnesses.
Features: -
a) Loan protection against home, home improvement, two wheelers
and four wheelers
b) In case of death remaining loan amount paid immediately
c) In case of survival no benefit is available
d) Premium payment option for regular and single is available
e) Premium payment term is 2/3 of loan period and remaining period
paid by the company
f) Maturity amount = All the premium paid amount
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g) Tax benefit is available
UNIT LINKED PLAN
A unit-linked policy is a life assurance policy in which the benefits
depend on the performance of a portfolio of shares. Each premium
paid by the insured person is split: a part is used to provide life
assurance cover, while the balance (after the deduction of costs,
expenses, etc.) is used to buy units in a unit trust.
In this way, a small investor can benefit from investment in a
managed fund without making a large financial commitment. As they
are linked to the value of shares, unit linked policies can go up or
down in value.
Policyholders can surrender the policy at any time and the surrender
value is the selling price of the units purchased by the date of
cancellation 9lessexpense). A small part of the contribution is used for
providing life cover and the balance is invested in unit. Legal heirs are
entitled to the amount of insurance cover and entitled units in case of
death of the insured. Reliance Life Insurance Company Limited has
also offered the two Unit Linked Plans, which are listed as follows:
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1) Reliance Market Return Plan
2) Reliance Golden Years Plan
Amongst the above plans the Reliance Market Return Plan is the
largest selling plan of the Reliance Life Insurance Company Limited.
The above two ULIP plans are discussed as follows:
1) Reliance Market Return Plan: -
Reliance Market Return Fund is the unit-linked product that helps you
invest in the financial markets in a combination of investment
instruments of your choice. You can enjoy the returns from the
markets without the trouble of monitoring and managing your own
investment portfolio and keeping track of the market movements. At
the same time your investment premiums provide you with insurance
cover. Reliance Market Return Fund unit-linked insurance plan
provides you with a basket of fund options that balances your return
and risk exposure while providing life cover at the same time.
Features: -
a) Minimum entry age is 30 days and maximum entry age is 65 year
b) Maximum policy term 40 year and minimum policy term 5 year
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c) Mode of premium as annual, quarterly, half yearly and monthly Rs.
1000 (for salary deduction only) and Rs. 2500 (standing order/credit
card)
d) Top up premium minimum Rs. 2500
e) Option of investment fund
i. Capital secure 100% fixed interest securities
ii. Balanced minimum 80% fixed interest securities and maximum
20% in equity
iii. Equity 100% equity
iv. Growth minimum 60% fixed interest securities and maximum
40% in equity
f) Loan facility is not available
g) One switches every year free and subsequent switches charged 1%
of the amount switched
h) Partial withdrawals per year under regular and single premium
options is 2 times
I) lock in period till today is 3 year
j) Minimum unit account balance after each withdrawal is Rs. 10,000
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2) Reliance Golden Years Plan: -
Reliance Golden Years Plan.. The Reliance Life Insurance no-
worry stay happy retirement plan. Reliance Golden Years Plan is a
flexible package that provides freedom of choice in choosing the type
of investment, life cover, vesting options such as commuting and
annuity options. Contributions provide Income tax savings as well.
Reliance Golden Years Plan, a flexible pension product is available for
all individuals who are between the ages of 18 and 65.
Features: -
a) Entry age minimum is 18 year and maximum 65 year
b) Minimum premium amount Rs. 10,000 and maximum is unlimited
c) Mode of premium payment is available
d) Pension plan with risk cover and without risk cover
e) Choice of investment
I. Capital secure fund 80% in equity and 20% in government
security
ii. Balanced fund 80% in government and 20% in equity
f) No loan facility is available
g) Tax benefit is available
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h) Annuity options
I. Annuity payable for life
ii. Annuity payable for 5/10/15 years certain and thereafter with life
iii.Annuity payable for life with return of capital on death of the
annuitant.
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CHAPTER NO. 4- HUMAN RESOURCE MANAGEMENT
RECRUITMENT
Recruitment is the process of finding and attracting capable applicants
for employment. The process begins when new recruits are sought and
ends when their applications are submitted. The result is a pool of
applicants from which new employees are selected.
SELECTION
Selection is the process of picking individuals (out of the pool of job
applications) with requisite qualifications and competence to fill job in
the organization. In simple words, it is the process of differentiating
between applicants in order to identify these with a greater likelihood
of success in a job. The Branch Manager, which includes-, will
conduct the process of selection of Sales Manager
1) Personal Interview: The first step of selection of Sales Manager
in the Reliance Life Insurance Company Limited is to conduct a
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personal interview of an applicant by the Branch Manager.
2) Project 40Interview: -After clearing the personal interview, the
project 40 interview will be taken by the Branch Manager. In this step,
the applicant should have to make a list of 40 and then start the
business with them.
3) Interview with Regional Head: After clearing the project 40
interview, the applicant should be interviewed by the Regional Head,
who will check his/her performance.
4) Negotiation: - After clearing the interview with Regional Head,
the negotiation will be provided to the applicant.
5) Medical Examination: - After that, the medical checkup should e
made to the applicant.
6) Selection: -After clearing all the above steps the applicant should
be appointed/selected as a Sales Manager in the company.
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computed as follows:
Training & Development = Standard Performance Actual
Performance
They are providing 100 hours training to their advisors,
who are newly recruited. They are also providing the product training
to their advisors and Sales Managers, who are newly recruited. The
100 hours training is to be conducted at Net Bios Computer Academy
whereas the product training is to be conducted at NIS SPARTA. The
NIS SPARTA
Institute has more than 150 batches and is trained over 3000 agents for
most of the private insurance companies. This institute is approved by
IDRA to train agents/advisors.
CAREER DEVELOPMENT
They are also providing career development plans, which will identify
potential and create avenues for growth.
COMMUNICATION
Communication is the process through which an individual can
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exchange their beliefs, things, information, and experience to others.
In simple words, it is the process of exchanging the information from
one person to another. They are providing an open environment,
which enabling free interaction between all levels. The communication
is provided in the following manner:
INCENTIVES
Incentives are monetary benefits paid to workmen in recognition of
their outstanding performance. They are providing an aggressive
reward and recognition plans, which are including sales incentives.
SERVICES
They are offering following certain services to their employees.
1) They are providing knowledge sharing and certification practices.
2) They are planned team building and fun events.
3) They are creating Reliance Life Insurance family, which includes
employees, associates and their families.
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4) Reliance Life Insurance in a team building mode and is looking for
performance driven, achievement oriented and challenge loving
performance.
PERFORMANCE APPRAISAL
Performance appraisal is the systematic evaluation of the individual
with respect to his/her performance on the job and his/her potential for
development. Performance appraisal is a formal, structured system of
measuring and evaluating an employees job related behaviors and
outcomes to discover how and why the employee is presently
performing on the job and how the employee can perform more
effectively in the future so that the employee, organization and society
all benefit.
They are providing a balanced scorecard approach for strategy
deployment and performance measurement, which goals and measure
financial, customer focused, process related and employee
development related initiatives. In addition to this, the Branch
Manager should measure the performance of the Sales Managers at
every six months and the Sales Manager should measure the
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performance of the advisors/agents. If the performance is best then
he/she will be prompted.
ORGANIZATION FORM ANDSTRUCTURE
CEO
CMO
Channel Head
Regional Head
Branch Head
Sales Manager CEO
Advisors/Agents
Customers
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DEPARTMENT
They are providing following areas or departments:
1) Retail Sales
2) Under Writing
3) Actuarial
4) Insurance Operations
5) Customer Service
6) Quality and Processes
7) Human Resources
8) Finance
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CHAPTER NO.5- MARKETING DEPARTMENT
DISTRIBUTION CHANNEL
Reliance Life Insurance Company Limited is using five types of
distribution channel, which are as follows:
1) Agency: -Independent insurance agents represent a number of
companies and can research these companies products to find the
right combination for their clients. Independent agents & insurance
producer groups are growing in prevalence. Although producer groups
are in their infancy, their emergence may potentially be realignment in
the distribution of financial services. Independent shops realized that
by pooling production and funding a central support office, they had
increased buying power. The one type of distribution channel, which
Reliance Life Insurance Co. Ltd is using, is an agency. This channel
works as follows:
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Branch
Managers
Advisors
Customers
2) Bank Assurance: While a lot of bank relationships with insurance
companies have been established, life insurance sales have been
slower than one would expect the primary bank insurance activities
have been the distribution of annuities, credit life, and direct
marketing insurance.
Banks are failing to incorporate successful sales tactics used to sell
other financial services like investments. Another type of distribution
channel is bank assurance. This channel is tie up with banks. In this
channel the advisors using or targeting the bank customers to make a
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business with them i.e., to sell the policy of the company.
3) Corporate:-To gain a better understanding of the demand amongst
independent advisors for trust services and to gain a better feel for
how independent advisors handle trust services, a research was
performed with independent advisors across several broker/dealers and
custodians.
The interviews revealed that demand is greatest for living trusts
among independent advisors, followed by demand for corporate
trustee services. Another type of distribution channel is corporate,
which are for employee benefits. This channel is tie up with corporate
or small enterprises. Through these small enterprises, the advisors will
sell the products/policy to customers of the small enterprises.
4) Rural Benefits: - Brokerage firms have gained much of the
institutional and personal trust business lost by the banks. These firms
have steadily captured assets, primarily at the expense of the banks.
The number of non-bank trust companies has increased in recent years
as independent trust companies have emerged and more broker/dealers
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are integrated services. Insurance companies view full-service brokers
as a potentially new distribution channel as well. Another type of
distribution channel is rural benefits. This channel works as a
dealership. In this channel, the dealers will sell the policy to the target
customers.
5) Web World: - Direct sales of life insurance are growing rapidly,
but many of the traditional full-serve players seem to be letting it go.
Across all financial services, consumers are expressing a willingness
to deal with a variety of providers on the web. Web sites are starting to
pop up offering consumer insurance products especially designed for
distribution over the web. Another type of distribution channel is web
world. This channel is tie up with customer database. In this channel,
the advisors will sell the policy to the target customers, which are
taken from the customer database, are listed in the website.
PROMOTIONAL PROGRAMMES &TARGET SEGMENT
Promotional programmes and target segment are related to each other.
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The promotional programmes are made to motivate the
advisors/agents and sales managers to do more business i.e., to sell the
more policies. The Reliance Life Insurance Co. Ltd has made three
promotional schemes, which are as follows:
1) Shubh Arambh:- This promotional scheme is detailed as
follows:
SLAB (WRP) REWARD
ACHIEVERS
30,000 Reliance Life T-Shirt
50,000 Table Top Clocks
75,000 Leather Bag
1, 00,000 World Space Radio
1, 50,000 L.G. Microwave- 19L
2, 00,000 DVD/VCD/MP3 Player
3, 00,000 Sony Music System
SUPER ACHIEVERS
5, 00,000 LG Refrigerators GL-233
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7, 50,000 LG Air Conditioner 1T
10, 00,000 Sony Digital Camcorder
15, 00,000 Trip to Dubai 3D/4N
20, 00,000 Hero Honda Splender
STAR ACHIEVERS
50, 00,000 Maruti Alto Std.
75, 00,000 Maruti Swift Lxi
1, 00,00,000 GM Aveo 1.4LS
2) R.A.R.E.:- The full form of R.A.R.E. is Reliance Advisors
Reward Experience. This programs consists of
1. New Advisor Incentive Program
2. Board of Advisors
3. Annual Discovery Series
4. Advisor Career Progression
5. RARE Club Loyalty Program
The above programs are described as follows
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1. R.A.R.E. Program New Advisor Incentives:-
Criteria
There will be two levels in the New Advisor Incentive program
A. Launch Pad
B. Take Off
2. R.A.R.E. Program Board of Advisors:-
Criteria
There will be two levels in the Board of Advisors program
A. Time Period
B. Parameters
3. R.A.R.E. Program Discovery Series:-
Criteria
There will be six levels in the Discovery Series program
A. Qualification period
B. Business criteria
C. The qualification criteria will be the same for both the Global and
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the National Discovery Series
D. Qualification for the Global Discovery Series
E. Qualification for the National Discovery Series
4. R.A.R.E. Program Advisor Career Progression:-
Advisor Career Progression
A. Business Associate
B. Sales Manager
5. R.A.R.E. Privilege Club:-
Levels
A. The RARE Club will have 6 different levels
B. The criteria for entry into each level will be based on
I. Business (WRP)
II. Persistency
III. Product Mix
3) Elite Club Scheme:- In this scheme the advisor, who have login
the regular premium of Rs. 2, 00,000 will be eligible for the Elite Club
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Membership.
COMPARATIVE STUDY
Presently there are 15 Life insurance companies in the country. There
is only one public sector company LIC and the rest 14 are private
sector. Although LIC has been dominating the Life Insurance business
since past few years the private players have now started to take the
momentum.
1) Major Market Players: -
Birla Sun Life Insurance Company: - Birla Sun Life Insurance
Company is a 74:26 joint venture between Birla group and Sun Life
Financial. It is a private sector company the company was registered
on 31/1/2001. The market share for FY 2005-06 was 1.89%.
HDFC Standard: - HDFC standard is a 74:26 joint venture between
HDFC and Standard Life. It is a private sector company. The
company was registered on 23/10/2000. The market share for FY
2005-06 was 2.87%.
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ICICI Prudential Life Insurance: - ICICI Prudential Life is a 74:26
joint venture between ICICI and Prudential. It is a private sector
company. The company was registered on 24/11/2000. The market
share for FY 2005-06 was 7.35%.
Life Insurance Corporation of India (LIC): - Life Insurance
Corporation of India is a 100% government held Public Sector
Company. Being the first to be established LIC is the share for FY
2005-06was 71.44%.
Kotak Mahindra OLD Mutual: - Kotak Mahindra OLD Mutual is a
74:26 joint venture between Kotak Mahindra bank and Old Mutual. It
is a private sector company. The company was registered on
10/1/2001. The market share for FY 2005-06 was 1.11%.
Max New York Life: - Max New York Life is a 74:26 joint venture
between J & Bank, Pallonji & Co and MetLife. It is a private sector
company. The company was registered on 6/8/2001. The market share
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for FY 2005-06 was 1.23%.
Aviva
Life Insurance Indi
a: - Aviva Life insurance is a 74:26 joint
venture between Aviva and Dabur. It is a private sector co mp any.
The company was registered on 14/5/2002. The market share for FY
2005-06 was 1.14%.
ING Vysya Life insurance: - ING Vysya Life Insurance is joint
venture between Exide (50%), Gujarat Cements (14.87%), Enam
(9.13%) and ING (26 %). It is a private sector company. The company
was registered on 2/8/2001. The market share for FY 2005-06 is
0.79%.
Baja j Allianz Life Insurance Co.: - Bajaj Allianz Life Insurance
Company is a 74: 26 Joint venture between Bajaj Auto limited and
Allianz AIG. The company was registered on 3/8/2001. The market
share for FY 2005-06 was 7.56%.
SBI Life Insurance Company Ltd: -SBI Life Insurance Company is
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a 74: 26 Joint venture between SBI and Cardiff S.A. The company
was registered on 31/3/2001.It is a private sector company. The
market share for FY 2005-06 was 2.31%.
The TATA AIGGroup: -TATA AIG group is a 74:26 JV between
Tata Group and AIG. It belongs to the private sector. The company
was registered on 12/2/2001. The market share for FY 2005-06 was
1.29%.
SaharaIndia Life Insurance Company Ltd.: -First Wholly Indian
Owned Private Life Insurance Company. The Company commenced
operations from 30th October 2004. The market share for FY 2005-06
was 0.06 %.
Shriram life insurance company Ltd: - Shriram Life is a recent
entrant into the life insurance sector It is a 74:26 joint venture between
the Shriram group through its Shriram Financial Holdings and Sanlam
Life Insurance Limited, South Africa. The company expects to start
operations soon.
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2) Market Sh
are: -
Sr. No Insurer Market Share (%)
1 LIC 71.44
2 Bajaj Allianz 7.56
3 ICICI Prudential 7.35
4 HDFC Standard 2.87
5 SBI Life 2.31
6 Birla Sun Life 1.89
7 Tata AIG 1.29
8 Max New York 1.23
9 Aviva 1.14
10 Kotak Mahindra OLD Mutual 1.11
11 ING Vysya 0.79
12 Reliance Life 0.54
13 MetLife 0.4
14 Sahara Life 0.06
15 Shriram Life 0.03
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CHAPTER NO.6- RESEARCH METHODOLOGY
OBJECTIVES OF STUDY
1) To get some good market exposure by dealing with the prospects
face to face.
2) To improve our ability to sell a financial product like life
insurance.
3) To know the perception of the consumer about life insurance.
4) To get a deep knowledge of the financial product like insurance.
5) To get some information about the market share of Reliance Life
Insurance as compared to the giants like LIC and to know the standing
of the company in the market.
QUESTIONNAIRE
It is most common instrument whether administered in person by
phone or online questionnaires are very flexible. The form of each
question is also important. Closed end question include all the possible
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answers and subjects matters choices among them. I have used open-
end questions so that customers can write answer in their own words.
I have also used closed-end questions, which provide answers
that are easier to interpret and tabulate. I have taken care in the
wording and ordering of questions. I have used simple, direct,
unbiased wording questions, which are arranged in a logical order. I
have asked personal questions at last so that respondent does not
become defensive.
Questionnaire of the customer
I have made questionnaire consisting seventeen questions to get
customers view about life insurance. I have asked personal questions
at last so that they do not become defensive. I have tried to know their
performance i.e. whether they want to invest, where they want to
invest, up to what amount and since when.
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SAMPLING METHOD AND SAMPLE SIZE
Introduction:-
Any organization whether big or small, private or public need
different types of information are to know its popularity. I have
gathered secondary data and primary data and collected information
from the combination of these two data.
Secondary data: -
Secondary data consist of information that already exists somewhere,
having been collected for another purpose. I have gathered secondary
data from website of different operators, different magazines,
newspapers and libraries.
Primary data: -
I have taken great care while collecting primary data to answer that it
is relevant, accurate, current and unbiased. I have taken a sample of 50
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people. I have visited them personally to get data.
Sample size: -
I have taken sample size of 50 respondents. Because the population is
too large so it is difficult to survey.
LIMITATIONS
I am a human hang, so there is some limitation of the human hangs
which is reflected in this research. The following are the
limitation of this research study.
1) The sample size of 50 might not represent the perception of whole
population, as the sample size is too small for total population of
Jaisalmer city.
2) The opinion expressed by the respondents may be biased.
3) The attitude of the research might be biased.
4) One of the most influencing and most critical limitations is that I
am not trained for the research study and this is my first study. I tried
hard to come at conclusion, but there is lack of expertise.
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ANALYSIS OF QUESTIONNAIRE
Here I have formed a questionnaire to study why people go for life
insurance. What is peoples major motive behind investing in life
insurance? Do they decide upon their own or they take guidance of an
agent? What is their perception about Reliance Life Insurance
Company Limited?
Questions:-
There are 7 questions in the questionnaire. Out of these 7 questions, 6
questions are close ended and one question is an open ended one.
Target Population:- I had conducted this survey among 50 people,
and the target group was a mix of people from the society. I asked the
questions to Doctors, Professionals, Professors, Advocates, Engineers,
and general public.
Analysis: - I have used pie charts, and some other statistical measures
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to analyze the questions.
Q.1 What is your m
ain motive behind investing in life insur
ance?
(a) Tax Benefit
(b) Savings
(c) Risk Cover
(d) Return/Yield
MOTIVE NO.
TAX 20
SAVING 05
RISK COVERAGE 23
RETURN/YIELD 02
TOTAL 50
Here we can see that majority of the people tend to invest in life
insurance for the risk coverage. The next preferred option is Tax
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Saving. We founded from the discussion with public and some experts
that those people with a low income tend to invest in life insurance to
gain tax benefit. Saving motive constitutes very small part of the total
sample. Return comes last.
But this is the general conclusion of 50 people. If we take a larger
sample, we can get a different result. As the private players have
launched ULIPs, more and more people are turning towards these
products so the Investment motive has been gaining command. Also
the number of those people who wish to invest for return is also
increasing.
According to a life insurance expert (Vinod Thakkar), life insurance is
for protection first then for Savings and Tax benefits all those things.
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Q.2 Rank the
above motives
according to your preference
MOTIVE OFINVESTMENT
PRE. TAX SAVINGS RISK RETURN/
COVER YIELD
1 21 3 24 1
2 19 11 16 4
3 8 25 7 10
4 2 11 3 34
We can see from the table and that the number one motive of people
about investing in life insurance is risk coverage, which is the main
theme of life insurance followed by Tax benefit. The third position is
of saving and fourth is Return. This shows that still people consider
other financial tools more viable for return and life insurance is for
Tax benefit and risk cover.
Q.3 How do you decide about investing in life insurance?
(a) On my own
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TOTAL 50
Here we can see that majority people (58%) decides on their about
investing in life insurance. 28% persons decide as per the guidance of
the agent. There is no contribution of employers in the decision of
ones investment in life insurance. 14% people invest in life insurance
as per the family decision.
Q.4. Which life insurance policy would you prefer to buy?
(a) Term Assurance
(b) Whole Life
(c) Endowment
(d) Combination of Whole Life and Endowment
(e) Unit Linked
This is another crucial question as there are number of products
offered life insurance companies. The products range from pure Term
Assurance Plans to Unit Linked Insurance Plans, which are relatively
new entrant in the market. We have already explained all these
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policies ahead. Now lets find out what people have to say:
Type of policy N0.
Term Assurance 9
Whole Life 9
Endowment 7
Combined 19
ULIPs 6
TOTAL 50
As it is evident from the table 38% people prefer combination of
Whole Life and Endowment product. It gives people double
advantage. The person would get some amount at the end of the
stipulated period; for instance 20 years, and after that period the risk
cover continues and the rest of the amount would be paid when the
person dies.
Q.5 Would you prefer Reliance Life Insur
ance or LIC for buying
thelife insurance policy?
(a) Reliance Life Insurance
(b) LIC
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This is the most important question as it reflects the scope of the
study. It is the main theme of this questionnaire. Prior to 2000 LIC
was the only player in the life insurance market and it had the total
market. So people had to go to LIC for buying life insurance policy.
But after the entry of private players in 2000, some people have also
turned to private life insurers.
Reliance Life Insurance Company Limited is newly launched
company. So it has fewer customers as compared to LIC. But the
ULIP plans are sold more of Reliance life insurance as compared to
LIC in todays environment. Now lets see what people say:
Particulars No.
Reliance Life Insurance 15
LIC 35
TOTAL 50
As evident from the table that 30% of people would prefer Reliance
Life
Insurance while 70% would prefer LIC.
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Personal Details: -
1) Age
(a) 18 to 30
(b) 31 to 50
(c) 51 to 65
Age No.
18 to 30 5
31 to 50 30
51 to 65 15
TOTAL 50
As evident from the table that I have taken a sample of 50. Out of
which 10% people are aged between 18 to 30, 60% people are aged
between 31 to 50 and remaining 30% people are aged between 51 to
65.
2) Occupation
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(a) Service
(b) Business
(c) Profession
(d) Housewife
(e) Retired
OCCUPATION NO.
Service 5
Business 15
Profession 10
Housewife 5
Retired 15
TOTAL 50
As the evident from the table that out of 50 respondents 10% are of
service men, 30% are of business men, 20% are of professions, 10%
are of housewives and remaining 30% are of retired.
3)Income
(a) 50,000 to 1, 00,000
(b) 1, 00,000 to 5, 00,000
(c) More than 5, 00,000
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Income (Per Annum) No.
50,000 to 1, 00,000 10
1, 00,000 to 5, 00,000 25
More than 5, 00,000 15
TOTAL 50
As the evident from the table out of 50 respondents 20% are earning
annually between 50,000 to 1, 00,000, 50% are earning between
1,00,000 to 5, 00,000 and 30% are earning more than 5, 00,000.
4)Family members
(a) 2
(b) 3
(c) 4
(d) More than 4
Family Members No.
2 5
3 15
4 20
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More than 4 10
TOTAL 50
As the evident from the table out of 50 respondents 10% have 2
family members, 30% have 3 family members, 40% have 4 family
members and remaining 20% have more than 4 family members.
SWOT ANALYSIS
SWOT analysis is the analysis of the internal and external factors,
which have impact on the survival of any organization. Now lets
make SWOT analysis for reliance Life Insurance Company Limited.
STRENGTHS:
1) Reliance Life Insurance Company Limited is the part of the
Reliance Capital.
2) The brand name is enough to sell the products easily.
3) Private placement of Rs. 10,000 crs worth of securities with RBI
by the government. Led to an improvement in market securities.
4) Strong liquidity from FII was the major reason for the up move.
5) Range of products
6) Reliance has a long and strong history of solvency, financial
stability.
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motive of tax benefit may turn to other instruments.
CHAPTER NO.7- FINANCE DEPARTMENT
FUND PERFORMANCE:-
There are four fund options, which Reliance Life Insurance Company
Limited has offered, which are as follows:
1)Capital Secure Fund:-
This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan.
In line with the objective of protecting the capital against any erosion,
61.4% of the funds were invested in short-term Government
Securities (Gilts) and to meet liquidity requirement higher about 40%
of funds are kept in short term bank deposits. The net return credited
to policyholders and the asset composition ratios are given in the
boxes below.
Net Returns during last 1 month (Mar.06) 0.36%
Net Returns during the last 3 months (Jan.-Mar.06) 1.10%
Net Returns during the last 12 months (Apr.05-Mar.06) 4.09%
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Net Returns since Inception in Feb03 (Annualized) 3.89%
Bank
Fixed Deposits
Asset Name % of total assets
Total Bank Deposit 38.60
Gilts
6.75% GOI 2006 6.75
11.68% GOI 2006 13.69
11.75% GOI 2006 40.96
Total Gilts 61.40
Total 100.00%
2) Balanced Fund:-
This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan. To take advantage of the bullish trend in the equity
market, the equity holdings in the fund was maintained as close as
possible to the maximum of 20% allowed for the fund. Bank deposits
were maintained only for the purpose of liquidity management. To
reflect their bearish view on the debt market the duration of the fixed
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income portfolio was kept low. Within the fixed income portfolio,
allocation to Gilts was higher than corporate bonds. All the bonds in
the portfolio are top rated.
3)Growth Fund:
This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan To take advantage of the bullish trend in the equity
market, the equity holdings in the fund was maintained as close as
possible to the maximum of20% allowed for the fund. To reflect their
bearish view on the debt market the duration of the fixed income
portfolio was kept low. All the bonds in theportfolio are top rated.
4) Equity Fund: - This fund is for Reliance Market Return Plan. In
line with thestated asset allocation pattern and their view of the
market, the entire corpus of the fund was invested in equities.
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CHAPTER NO. 8 CONCLUSION
1. After the deep study of insurance sector of India, I can tell that this
is the sector, which has most business opportunities perhaps in India.
2. Insurance industry is one of the fastest sectors in India. Insurance
sector has been growing by 25% to 30% and it is expected to increase
by 50% in coming 5 years. After the opening up of the insurance
sector, it has become much competitive and insurance awareness
among people has increased.
3. As far as the comparison of Reliance Life Insurance and other
player is concerned, there are both positive as well as negative
impacts on both the sides.
4. For Reliance Life Insurance, the negative aspect is that its market
share is low.
5. For private players the negative aspect is that they have to fight
with the public sector giant which is established player with a high
brand value.
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6. But the positive impact is that the life insurance awareness has
increased and the business of Reliance Life Insurance has increased.
CHAPTER NO.9- BIBLIOGRAPHY AND REFERENCES
www.reliancelife.com
www.indiainfoline.com
www.bimaonline.com
www.google.com
Life Time Magazine of Reliance Life Insurance
Net Bios Computer Academys Life Insurance Book
Broachers of Reliance Life Insurance
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