Study of Indian Life Insurance SectorPage | 1

IFIM BUSINESS SCHOOL

SUBMITTED BY: MAJID KHAN PGDM SEC.A

SUBMITTED TO: PROF. Anantha Murthy N.K

Project Report Company Name: SUVUSION HOLDINGS PVT LTDPage | 2

About Company: Indiamoney.com an online resource center for investors, professionals and students. IndianMoney.com is promoted by Suvision Holdings Pvt Ltd, a venture based in Bangalore. Our team respects and appreciates the desires of its readers to learn new financial concepts and become a successful investor. IndianMoney.com wants to become an adviser for your investments and financial planning needs. Indianmoney do not provide any brokerage for insurance, MF or stocks. They believe in quality, timely and fact based advice and services for the success of our readers. The company believes in Transparency, Honesty and High Ethical behavior, which separates us from most of our competitors. IndianMoney.com team carries the rich experience of its team members involved in different financial and technology services industry for years. they have a dedicated team of writers who are passionate about sharing their experience and knowledge with the readers. IndianMoney.com has an in house and dedicated research and advisory group which offers intraday, short term and long term stock recommendation to people. These Stock Tips has historically given an average daily return of 2.5%. IndianMoney.com also provides live updates of stock markets, both Sensex and Nifty as well as market commentary, which includes coverage of companies, their stock performance, sector research and economy reports. Vision: Vision of the company is to be the most preferred admired and trusted financial portals in India and emerge as the leader in the business segment by providing broad range of investments and financial planning advisory services in the coming 5 years.

Mission: Mission of the company is to be a leader in investment advisory by developing andPage | 3

delivering high quality and reliable services to cater to the needs of its stakeholders. Executive Team: Mr. C.S.Sudheer - Founder & MD Mr. C.S.Sudheer is the CEO of the company. He has led the emergence of the company by executing the long term strategies and sketching direction for the companys growth. Prior to his current role, Mr. Sudheer served as the Regional Head of Howden India. He started his career with ICICI Prudential Life Insurance and later on moved to Howden India. In the year 2008 he founded Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens. Mr. Rahul Singh - Director Mr. Rahul Singh is the COO of the company. He leads the company's business operations and executes business strategy ensuring operational excellence. He worked as a developer and a project lead at Support Soft India, a small software firm, where he was instrumental in establishing a critical product vertical within the firm. He also spent two years at Infosys. He also worked as a Business Strategy intern at Wetpaint.com Inc. in Seattle and gained significant experience in managing strategy and operations at a start-up. Mr. Rahul Singh is a B.Tech (Electronics) from IIT Roorkee. He did his MBA from Kelly School of Business, Indiana University in 2008.

Mr. Ravindra Krishnappa - Director With over two decades of industry experience, Ravindra Krishnappa is an expert inPage | 4

global ERP Management and implementations. He has to his credit, being one of the founding members of Inatech Infosolutions (a subsidiary of Calsoft). Prior to Inatech, he was the founding partner of EWI Business Consulting which was later acquired by Oracle and later went on to be called Oracle SSI. Ravindra has spent many years outside of India working with various organizations and offers this experience to various companies for their business and strategy in an advisory capacity. He is also a regular speaker at seminars and various other public and industry forums.

Services offered by the company:

1. Financial Literacy: It is a unique concept conceived at the company which talks about earning for self, earning for the Society and earnings for the Nation simultaneously because company feels financial literacy is MUST FOR ALL. 2. IndianMoney.com Journal IndianMoney.com Journal is Indias first fortnightly journal which aims to promote FINANCIAL LITERACY across the country. Highlights of the journal include comprehensive articles on Real Estate, Capital Market, Insurance, Mutual Fund, Banking and other financial verticals. Unique Features include: Money Mother,

Pocket Money Manager, Peoples column, Professional column, Indianisation, Money Dictionary, City Planning, First salary, Young Achievers, Green initiatives.Page | 5

3. IndianMoney.com Money School It is not all about money making; it is about helping the people to understand the real value of money as most of the problems in Indian starting from Divorce to Corruption are because of money. IndianMoney.com aims to integrate this vertical soon into the websites of various colleges across India. 4. Financial Planning Advisory: IndianMoney.com has an in-house dedicated team which helps people plan out their finances. Note that it is ONLY into advisory services and not into vouching for products of any particular company.

Research Design: Population: Respondents of the Bangalore city. Sample Size: 50 sampling units

Life Insurance Industry in India In India, Insurance is a national matter, in which life and general insurance is yet a booming sector with huge possibilities for different global companies, as life insurance premiums account to 2.5% of Indias GDP. The Indian Insurance sector has gone through several phases and changes, especially after 1999, when the Govt. of India opened up the insurance sector for private companies to solicit insurance, allowing FDI up to 26%. Since then, the Insurance sector in India is considered as a flourishing market amongst global insurance companies. However, the largest life insurance company in India is still owned by the government. The Insurance Industry has grown (premium as percentage of GDP) from 2.3 per cent in 2001 to 5.2 per cent in 2011.The report estimates the total insurance premium at approximately Rs $350-400 billion in 2020 with Life Insurance making 90% of the premiums.The profitability of the industry is negative as they have spent their energies in expanding their base in a rapidly growing market without concentrating on the margins leading to a cumulative loss by private insurers of around $3.5 billion. However the huge size of the insurance market which has been estimate at an astounding $350 billion in premium by 2020 is attracting companies in droves. Almost all major global insurance companies have a presence in India through JV (as government regulations only allow 26% holding). Major Indian Banks and Finance Companies to have a presence in the sector through JV with foreign partners who bring the expertise. What is Life Insurance Insurance is a contract between two parties, the insurer or the insurance company, and the insured, the person seeking the cover. Within this contract, the insurer agrees to pay the insured for financial losses arising out of any unforeseen events or risk in return for a regular payment of premium. Thus, these insurance plans are also called as a Risk Cover Plans, which means to financially compensate for losses that occur uncertainly through accident, illness, theft, natural disaster. One cannot fight against these man-made and natural calamities, but can be prepared for them and their aftermath by taking insurance policies. Insurance is about risk cover and protection. By buying life insurance, one can buy peace of mind. Insurance also serves as an excellent tax saving mechanism. The Government of

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India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets.Insurance Regulatory & Development Authority (IRDA) is regulatory and development authority under Government of India in order to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry. History of Insurance: The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912. The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of India insurance.

In India, insurance has a deep-rooted history. Insurance in various forms has been mentioned in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmashastra) and Kautilya (Arthashastra). The fundamental basis of the historical reference to insurance in these ancient Indian texts is the same i.e. pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. The early references to Insurance in these texts have reference to marine trade loans and carriers' contracts. Insurance in its current form has its history dating back until 1818, when Oriental Life Insurance Company was started by Anita Bhavsar

in Kolkata to cater to the needs of European community. The pre-independence era in India saw discrimination between the lives of foreigners (English) and IndiansPage | 8

with higher premiums being charged for the latter. In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer. At the dawn of the twentieth century, many insurance companies were founded. In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium-rate tables and periodical valuations of companies should be certified by an actuary. However, the disparity still existed as discrimination between Indian and foreign companies. The oldest existing insurance company in India is the National Insurance Company Ltd., which was founded in 1906. It is in business. The Government of India issued an Ordinance on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. In 1972 with the General Insurance Business (Nationalization) Act was passed by the Indian Parliament, and consequently, General Insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National

Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. ThePage | 9

General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on 1st January 1973. Future Growth of Insurance Sector: India's insurance industry is expected to touch the USD 400 billion mark by 2020, with scope for further penetration, but the sector players need to adopt a customer centric operating model, a study has said. At present, the insurance industry comprising 23 life and 24 non-life companies is valued at over USD 66 billion. "The insurance industry will be USD 350-400 billion (about Rs 18 lakh crore) in premium income by 2020, making India a top 3 life insurance market and a top 15 non-life insurance market by 2020," according to a study jointly done by FICCI and the Boston Consulting Group. Besides, there has been a massive increase in the number of people covered. In life insurance, the number of policies in force has increased from about 20 million in 2001 to about 230 million in 2010, a nearly 12-fold increase, the study said. The other big increase in coverage is in the health insurance space. The number of lives covered through health insurance has increased from just 2 million in 2001 to nearly 55 million in 2010, a nearly 25-fold increase.

Life Insurance Companies in India 1. Life Insurance Corporation of India Life Insurance Corporation of India (LIC) is a Government of India enterprise, and is the largest life insurance company .LIC had been established in 1956, after the Life Insurance Corporation Act had been passed by the Parliament of India in the same year. It also provides savings features along with various insurance policies. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance. LIC with its massive corpus is also the largest investor in the Indian market. LIC continues to be the best insurance company in India just because of its track record and the high trust it is held in. Private life insurance companies in India like the Car Insurance Companies are held in low trust and it is true considering the harassment and the low claims percentage that these companies give out. Even if LIC cant manage to give the polish of the private insurers, its scores on delivery which the only thing that matters. 2. TATA AIG - Tata AIG Life Insurance Company Limited is a joint venture between the Tata Group and American International Group, Inc. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 percent. Tata AIG General Insurance Company, which started its operations in India in 2001, provides insurance solutions to individuals and corporates. It also offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel as well as several specialized financial lines. 3. Bajaj Allianz Bajaj Allianz life Insurance Company Limited is a joint venture between Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Bajaj Allianz has made a profit before tax of Rs. 180 crores and has become the only private insurer to cross the Rs.100 crore mark in profit before tax in the last four years. Today, Bajaj Allianz is one of Indias leading and fastest growing insurance companies. 4. Reliance Life Insurance Ltd. -It is a part of Reliance Capital Ltd (ADAG Group) which one of Indias leading private sector financial services companies. In just 2 years, the Company has crossed the mark of 1.7 Million policies. It is one of Indias leading private insurance companies with over 94 customized insurance products catering to the corporate, SME and individual customers. Reliance Life Insurance is not only one of Indias fastest growing life insurance companies, but also counts among the top 4 private sector insurers.

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5. Birla Sunlife Insurance - Birla Sun Life Insurance Co. Ltd. is a joint venture between Aditya Birla Group and Sun Life Financial Inc. This insurance company has pioneered the unique Unit Linked Life Insurance Solutions in India. Within 4 years of its launch, BSLI became one of the leading players in the industry of Private Life Insurance. 6. HDFC Standard Life Insurance- It is a joint venture between HDFC Limited and a Group Company of the Standard Life Plc, UK. The Company is one of leading private insurance companies, offering a range of individual and group insurance solutions, in India. Being a joint venture of top financial services groups, HDFC Standard Life has adequate financial expertise to manage longterm investments safely and resourcefully. The Companys business premium income stood at Rs. 1,839.70 Crores in 2008; it has covered over 812,811 lives so far. 7. ICICI Prudential Life Insurance - It is a joint venture between ICICI Bank and Prudential plc, which is a leading international financial services. ICICI Prudential began the operations in December 2000. It has been voted as Indias Most Trusted Private Life Insurer for three consecutive years. ICICI Prudential Life Insurance Company has various insurance plans that have been designed for different individuals, as every individual has different insurance needs. 8. ING Vysya Life Insurance It is a joint venture between Vysya Bank, which is one of the largest private sector banks in India, and ING Insurance Co., which is the worlds second largest life insurance company. It presently has around 4.5 lakh customers. 9. Max New York Life Insurance -It is a joint venture between Max India Limited, which is a multi-business corporate, and New York Life International, which is a Fortune 100 company . Max New York Life offers a variety of flexible products covering both life and health insurance including 8 riders that can be customized to over 800 combinations 10.Met Life India Insurance Co. Pvt. Ltd. It is a joint venture between MetLife Group and its Indian partners, are J&K Bank, Dhanalakshmi Bank, Karnataka Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu. MetLife is 88 of the top one-hundred FORTUNE 500 companies. MetLife entered Indian insurance sector in 2001.

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11.Kotak Mahindra Old Mutual Life Insurance Ltd. iJoint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra Old Mutual Life Insurance Ltd. is a company which offers Life Insurance products. It is one of Indias most rapidly growing insurance companies. 12.SBI Life insurance Co. Ltd. SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74% of the total capital and BNP Paribas Cardif the remaining 26%. SBI Life Insurance has an authorized capital of Rs. 2,000 crores and a paid up capital of Rs 1,000 crore. Along with its 5 Associate Banks, State Bank Group has the unrivalled strength of over 18,000 branches across the country, arguably the largest in the world. BNP Paribas Cardif is the life and property & casualty insurance arm of BNP Paribas, one of the strongest banks in the world. BNP Paribas Group, having presence in more than 80 countries ranks highly in Retail Banking, Investment Solutions and Corporate & Investment Banking. BNP Paribas Cardif is one of the world leaders in creditor insurance and its life and non-life insurance units have received an AA rating from Standard & Poors.

13.Aviva Life Insurance- It is a private insurance company, formed by a joint venture between the Aviva insurance group of UK and the Dabur group of India. Aviva holds 26 percent stake and the Dabur group holds the balance 74 percent share in the joint venture. Aviva is also known as the fifth largest insurance group in the world. At the time of nationalization, Aviva was the largest foreign insurer in India in terms of the compensation paid by the Government of India. 14.Shriram Life Insurance - It is a joint venture of the Shriram Group of India and SANLAM of South Africa. The group offers several policies catering to various needs of the policy holders. Along with life insurance, distinct policies cover subjects like child education, retirement funds, marriage of children, expectation of high returns etc. 15.Sahara India Life Insurance Company Ltd. Was granted license by IRDA in 2004. It is the first wholly Indian-owned company in the Indian life insurance market without any collaboration with the organizations abroad. The paid up capital of the insurance company at the time of its commencement was Rs 157 Crore. TThe company offers both individual and group insurance products.

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16.Bharti AXA Life Insurance - It is a joint venture between Bharti and AXA global leader in financial protection and wealth management. Bharti AXA Life Insurance has a 74% stake from Bharti and 26% stake of AXA in the joint venture. The Company launched its operations in India in 2006.With the continuous expansion, Bharti AXA Life Insurance is making itself proactive to cater to insurance and wealth management needs of people. 17.Future Generali India Life Insurance. It is one of the rapidly growing Insurance companies in India. The Company is a joint venture between the India-based Future Group and the Italy-based Generali Group. Future Generali group is present in both the Life and Non-Life businesses in India. 18.IDBI Fortis Life Insurance - It is a joint venture of IDBI Bank, Federal Bank (India) and Fortis Insurance International. IDBI has a 48% stake in the venture, while Fortis and Federal Bank 26% stake each. While IDBI and Federal Bank are major Indian banks, Fortis has the expertise of bancasurance across global markets. IDBI Fortis Life Insurance has become 18th life insurer in India. 19.Canara HSBC Oriental Bank of Commerce Life Insurance Canara Bank, HSBC Insurance (Asia-Pacific) Holdings Limited and Oriental Bank of Commerce (OBC), together established an insurance company. Canara Bank holds 51% equity while the holdings of HSBC and OBC are 26% and 23%, respectively. 20.AEGON Religare Life Insurance Company . - It is a joint venture of AEGON, Religare and Bennett, Coleman & Company. One of the pioneers in offering low cost term plans online. 21.DLF Pramerica Life Insurance Company - It has been formed by the collaboration between DLF Limited and Prudential International Insurance Holdings, Ltd. (a fully owned subsidiary of Prudential Financial, Inc.). The insurance company aspires to become a significant player in the growing Indian life insurance market. 22.Star Union Dai-ichi Life Insurance It is a joint endeavor of Bank of India and Union Bank of India (two major Public Sector Banks in India) and Dai-ichi Mutual Life Insurance Company. It has an initial capital of Rs. 250 crores, of which Bank of India has a 51% stake, Union Bank of India has 23% and Daiichi Life holds 26% stake. The company is expected to be a strong contender in the insurance sector, taking into consideration its insurance, IT, finance and

investment resources. The enterprise offers various products to serve all sections of the society.

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ADVANTAGES OF LIFE INSURANCE: a) Risk Cover: Life today is full of uncertainties; in this scenario Life Insurance ensures that your loved ones continue to enjoy a good quality of life against any unforeseen event. b) Planning For Life Stage Needs: Life Insurance not only provides for financial support in the event of untimely death but also acts as a long term investment. You can meet your goals, be it your children's education, their marriage, building your dream home or planning a relaxed retired life, according to your life stage and risk appetite. c) Protection Against Rising Health Expenses: Life Insurers through riders or stand alone health insurance plans offer the benefits of protection against critical diseases and hospitalization expenses. d) Builds The Habit Of Thrift: Life Insurance is a long-term contract where as policyholder; you have to pay a fixed amount at a defined periodicity. This builds the habit of long-

term savings. Regular savings over a long period ensures that a decent corpus is built to meet financial needs at various life stages.Page | 15

e) Assured Income Through Annuities: Life Insurance is one of the best instruments for retirement planning. The money saved during the earning life span is utilized to provide a steady source of income during the retired phase of life. f) Facility Of Loans Without Affecting The Policy Benefits: Policyholders have the option of taking loan against the policy. This helps you meet your unplanned life stage needs without adversely affecting the benefits of the policy they have bought.

g) Tax Benefits: Insurance plans provide attractive tax-benefits for both at the time of entry and exit under most of the plans. Project Objective: To know up to what extent consumer have the knowledge of life insurance products To find out the percentage of income that respondents invest in various Life Insurance products

To determine the criteria considered by the investors while investing in the Life Insurance ProductsPage | 16

To find out the satisfaction level of the customers regarding the services provided by the insurance companies

Monthly reviewMonth 1: 1st Week: Attended training 2nd Week: Handled Free financial planning forms from Kolkata. Advised people based on their financial requirements. 3rd Week: Handled Free financial planning forms from Delhi and most of the forms were invalid 4th Week: Handled Free financial planning forms from Kolkata. But associates were not there for Home loan as most of the people required home loan Month 2: 1st Week: Handled CRM database 2nd Week: Handled old data from CRM i.e., 2010 data and updated the customers profile. 3rd Week: Handled CRM database of Rest of India from places like West Bengal and other States. 4th Week: Attended training Month 3: 1st Week: After handling old data, I started to handle every days follow ups of Maharashtra

2nd Week: Handled every days follow-ups and previous months pending follow-ups. 3rd Week: Got a chance of doing Delhi follow ups from CRM database.Page | 17 4th Week: Given the feedback to the call to customers of whether they have purchased the

product or looking for some other proposal also

Free Financial form and CRMThe free financial planning forms contain the details of individual who are in need of financial advising which has done through the survey conducted by the promoters of the company. Based on the requirements of the customers fill up the form and we have to provide financial advice to them. Before advising to the customer about the product first we need to validate the form and explain about the financial product they are looking for and according to that parameters they should see before purchasing or investing. I also ask their annual income because according to that I can advise him what suits him or her better. The CRM database contains the data who has register in Indianmoney.com website. There they can post their queries and the area they want to get advice. Compare to free financial planning forms I felt Handling CRM database is much simpler because its easy to explain to the customer who has come to us rather and requires advice regarding specific product than explaining to the people who dont know why they have filled the free financial planning form?. Different customer has different view that has given me the chance to understand the financial products better. After advising if the customer is interested in investing or purchasing the financial product, we refer the customers name and number to associates of different companies who is selling the product. They dont charge a single rupee from the customer and if the customer is not interested in any financial product we have to put the follow up for any future dates. If the customer also want to look advice of other companies we can refer the customer preference like LIC, BAJAJ ALLIANZ, SBI and many more.

Learning I got while doing Internship from Indian money:I am highly obliged to the firm with the thing which I was able to learn while doingPage | 18

internship: a) Knowledge about importance of Insurance: Previously I thought doing insurance is just a waste of money and people who do insurance are silly person. But after doing internship at Indian money I started understanding how much is necessary is insurance for a person, for his future and his family members. b) Knowledge about different Insurance products: while doing internship I got to know more about different kind of insurance products that are provided by the insurance companies for its customer like ULIPS(UNIT LINKED INSURANCE PLAN), NPS (NATIONAL PENSION SCHEME) and many more other products. c) Providing financial education to customer- It was a great learning experience as we are getting to provide financial literacy to Indian customers as maximum of our Indian population are unaware about the insurance products and with which the agent and sales person are take advantage and make fool to the citizen and customer usually trust these people as they dont have much knowledge about the product so the company Indian money provide free financial education to the citizen of our country so they can beware if the agent or sales person tries to misguide the citizen of our country.

Future work plan:Page | 19

To understand the knowledge of customer about insurance products To develop a questioner which gives detailed view about the knowledge about insurance products in Indian consumers

To study on the factors influencing the investments in insurance products Advise the parameters they should see before investing.